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Arizona Attorney General
Terry Goddard
Educating • Protecting • Empowering Arizona Consumers
Arizona
Attorney General’s
Office
1275 West
Washington Street
Phoenix, Arizona 85007
602.542.5025
400 West Congress
South Building
Suite 315
Tucson, Arizona 85701
520.628.6504
Outside the Phoenix
or Tucson metro area
800.352.8431
www.azag.gov
Top 10
Consumer
Scams
Arizona Attorney General’s
Red Flags and Protection Tips
Other publications av
ailable from the Arizona Attorney General’s Office include:• Civil Rights: • Employment Discrimination - Get the Facts • Discrimination in Places of Public Accommodation • Housing Discrimination - Get the Facts • Voting Discrimination• Consumer Guide for Young Adults• Consumers’ Guide to Buying a Car• Identity Theft• Internet Safety Guide for Parents and Teens• Life Care Planning• Predatory Lending• Victims' RightsFor more information,contact:Crime, Fraud & Victim Resource CenterArizona Attorney General’s Office1275 West Washington StreetPhoenix, Arizona 85007602.542.2123 or 800.352.8431communityservices@azag.govSubscribe to the Attorney General’sscam alerts and messages oncurrent issues at www.azag.gov.www.azag.govCrime and FraudPrevention InitiativesThe Attorney General’s Officeincludes Satellite Offices throughout the State and the Fraud Fighter Van. Satellite Offices make it easier for residents to get information on crime prevention, consumer fraud, and civil and victims’ rights issues in their own neighborhoods. Fraud Fighter Volunteers are available to make educational presentations to community groups and distribute materials at local events. A complete list of Satellite Office locations and schedule of events are posted on the Attorney General’s Web site at www.azag.gov. The Fraud Fighter Van is the newest tool to bring services and information to senior centers, libraries and neighborhoods. The Fraud Fighter Van is filled with informa-tion about identity theft, scam alerts, Internet safety and much more.3
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Message from Attorney General Terry Goddard...............................3
Auto Purchases and Repairs............................................................4
Work-at-Home Jobs and Business “Opportunity” Schemes...........12
Certified Check Fraud.....................................................................16
Charity Fraud and Scams...............................................................18
Internet Auctions and Fraud...........................................................22
Identity Theft..................................................................................26
Mortgage Foreclosure “Rescue” Schemes.....................................32
Payday and Other “Quick Cash” Loans..........................................38
Prize Notification Scams.................................................................42
Telemarketing Rip-offs....................................................................46
Resource Page...............................................................................50
Important Information about Consumer Complaints.......................56
The material in this brochure is not copyrighted. Organizations are encouraged to reprint this booklet or excerpts and do not need to contact the Attorney General’s Office for permission.
Table of Contents
“High-priced loans, ‘phishing’ schemes,
the Nigerian letter scam and variations of the international lottery winner notice have victimized
far too many Arizonans. New scams target our citizens every day.
I want to help consumers stop
scam artists before they strike. Remember, if it sounds too good
to be true, it probably is!”
Arizona Attorney General Terry Goddard2 3
Message from Attorney General
Terry Goddard
January 2009
Fake checks, mortgage rescue schemes, “opportunities” to make $100,000 a year working in your pajamas and variations of the international lottery winner notice have victimized far too many Arizonans. While my Office vigorously enforces the consumer fraud laws, I want to help consumers stop scam artists before they strike. With more information about consumer fraud and available resources, more Arizonans will spot the red flags and protect themselves and their families.
This booklet provides a practical guide to the “Top 10” most common consumer problems and scams reported to the Attorney General’s Office in 2007 and 2008. It is designed to empower consumers so they can avoid becoming a victim. Please review this information carefully. Share it with friends, neighbors and loved ones – anyone who might need it. The “Top 10”, along with other consumer tips, is also available on our Web site at www.azag.gov.
I urge you to report fraudulent activities and hope that this booklet will help you to recognize them. In addition, consumer fraud complaints help the Attorney General’s Office determine which consumer problems are the most serious and provide an invaluable resource in directing our litigation efforts. The Resource Page at the end provides contact information for agencies that can help.
Sincerely,
Terry Goddard
Arizona Attorney General
Hundreds of seniors across the state turned over their junk mail,
which was inspected for scams and fraudulent offers.
“It is through efforts such as Seniors Strike Back
that we learn of patterns of fraud and illegality.”
Arizona Attorney General Terry Goddard4 5
Buying a New or Used Car
Next to a home, an automobile is often the largest purchase con­sumers make. Consumers who are not aware of their rights often make bad deals.
The Attorney General’s Office has a separate publication entitled Consumers’ Guide to Buying a Car: Steer Clear of Trouble! that is available on our Web site at www.azag.gov.
Red Flags
• A salesperson rushes you to sign paperwork without giving you a chance to review the contract terms.
• Advertised minimum trade-in amounts and free gifts. Dealers may raise the price of the car to offset a low value trade-in or the cost of the “gift.”
• A contract that has terms substantially different than what was advertised or what the salesperson promised.
• A salesperson suggests putting false information on your finance application, such as inflating your income. Providing false infor­mation to obtain financing is a crime and you could end up with a contract you cannot afford.
• A salesperson suggests you take the car home before financ­ing is approved. This practice is designed to “lock you in” to a purchase. If you take a newly purchased car home and find out later you will have to pay more than expected for financing, you should be able to get your trade-in back and return the newly purchased car (A.R.S. § 44-1371).
Auto Purchases and Repairs
Protect Yourself
• Do your homework. Get information about car dealers from the Better Business Bureau (us.bbb.org). Research the car’s value before negotiating a price. Look up the value in the Kelley Blue Book (www.kbb.com) or at Edmunds.com (www.edmunds.com).
• Arrange financing with your bank or credit union before car shopping.
• Be skeptical of the claims made in car advertisements and read the fine print carefully. (Save copies!)
• Make sure all promises made by the salesperson or dealership are put in writing and that you get a copy.
• Request a free vehicle history report from the dealer before buying a used car.
• Read all documents and understand all terms before signing a purchase contract. Do not sign contracts with blank spaces.
• Make sure the financing is approved before turning in your trade-in vehicle or accepting the new car.
• If you are buying a used car, have a trusted mechanic inspect it before you buy.
• If you decide to finance through a dealer, negotiate the price first. Once the price is settled, then negotiate the monthly payment.
• With dealer financing, always ask the dealer if the interest rate being offered is their lowest rate, whether the rate includes any profit for the dealer, and if so, how much.
• REMEMBER: Arizona does not have a cooling-off period or three-day right to cancel a car sale.6 7
Extended Warranties and Service Contracts
At the time of purchase, dealers may offer an extended warranty or service contract for an additional cost, but it can be expensive. In fact, extended warranties are often one of the most profitable aspects of car sales. Think carefully before purchasing a service contract. If the car model you have purchased has a record of reliability or you expect to own your car for five years or less, it may not be worthwhile to purchase an extended warranty.
If you are interested in a service contract, remember that cost and coverage vary greatly and may be subject to negotiation. Make sure you receive a copy of the terms and conditions of the contract from the provider.
If you pass on an extended warranty at the time you purchase your car, you may receive notices in the mail years later informing you that your original warranty is about to expire or has expired. These notices may not come from the dealership where you purchased your car, but instead may be sent by an independent service contract provider trying to sell you an extended warranty. Certain providers of service contracts or extended warranties must be registered with the Arizona Department of Insurance. Therefore, before responding to a solicitation, contact the Department of Insurance (www.id.state.az.us) to make sure the extended warranty provider is in compliance with state law.
Arizona’s Lemon Law
New Car: The Arizona Lemon Law (A.R.S. § 44-1261 et seq.) has some specific protections. Consumers should consult the law or an attorney if their new car does not operate in a reasonable manner.8 9
Here are the basics:
The period covered by the Lemon Law is the same as the term of the manufacturer’s warranty or two years or 24,000 miles, which­ever is earlier. The covered period begins on the date the consumer receives the vehicle.
During the covered period, if the manufacturer fails to repair the defect(s) after four attempts, or if the car is out of service by reason of repair for a cumulative total of 30 or more calendar days, the manufacturer must accept return of the car or replace it with a new car (contact your dealer).
Used Car: A used car is covered by the Arizona Used Car Lemon Law (A.R.S. § 44-1267) if a major component breaks within 15 days or 500 miles after the car was purchased, whichever comes first. You have to pay up to $25 for the first two repairs. The recovery for the consumer is limited to the purchase amount paid for the car.
Car Repairs
At some point, your car will need repairs. Knowing how your car operates and familiarizing yourself with the owner’s manual for your car will help you spot problems. It is best to find a trusted mechanic and auto repair shop before your car needs repairs. This will help you avoid making a last-minute or unnecessarily expensive decision.
Terry Goddard Urges Caution on Extended Warranty Offers
(Phoenix, Ariz. – Dec. 5, 2007)
Attorney General Terry Goddard is warning consum­ers to be cautious in review­ing mail or telephone solici­tations to Arizona residents indicating their car warran­ties are about to expire. These solicitations are sent to consumers encouraging them to purchase an extended warranty.
The cards may have names similar to official organiza­tions or government agen­cies and may be stamped with phrases such as “final notice” or “priority level: high” to create a sense of urgency. When consumers call the phone number provided on the card, they may be encouraged to purchase a high-priced extended warranty for their vehicle. In some cases, callers
are told they must make a down payment prior to receiving warranty information from the company.
(For the full version of this Scam Alert visit www.azag.gov)10 11
Red Flags
• Aggressive scare tactics employed by repair shop personnel to pressure customers.
• Refuse to give you a written estimate.
• Failure to provide a warranty on parts and labor.
Protect Yourself
• Ask for car repair recommendations from people you trust. Check with the Better Business Bureau to see if there are any complaints against the repair shop.
• If your car is under warranty, make sure that the repair shop is authorized to provide service for your car’s make and model. Work done by an unauthorized repair shop could void the warranty.
• If possible, get several written quotes from different repair shops before a major repair is done.
• Get a written estimate first. The estimate should identify the problem to be repaired, the parts needed and the anticipated labor charge. Make sure you get a signed copy of the estimate.
• Pay your bill with a credit card, if you can, to give you maximum flexibility to dispute the charge if something goes wrong.
• Prepare for repairs by learning about your vehicle and preventa­tive maintenance, before you experience a problem.
• Test drive your vehicle after having it repaired to make sure the car is fixed to your satisfaction.
• There is no such thing as a “standard warranty” on repairs. Make sure you understand what is covered under your warranty and get it in writing.12 13
In a tight economy, more and more people are turning to work-at-home jobs and “business opportunities” to supplement their income. There are many legitimate companies that offer these opportunities in customer service and other areas. People seeking work-at-home jobs and business opportunities need to be aware of scams that can take advantage of consumers. These schemes all have one thing in common: something must be purchased before work can begin. Envelope stuffing is a common work-at-home scheme. Promoters usually advertise that, for a small fee, they will tell you how to earn money by stuffing envelopes. However, the consumer usually only receives a list of businesses to contact about job opportunities. Assembly work or craft work often requires the investment of hundreds of dollars in equipment and supplies, as well as many hours to produce goods for a company that has promised to buy them.
Multi-level marketing (MLM) companies are another type of business “opportunity” that frequently use the Internet and telemarketing operations to lure participants. MLM businesses claim they are marketing a product, but they are actually marketing a scheme in which earnings are based on the number of new individuals recruited into the program, not on the quality of the product. These companies entice prospective participants with promises that they will have their own business, establish their own work hours and earn enough money to purchase a new car or boat, pay for their children’s education or take a fabulous vacation. Promoters claim these pyramid schemes are legal because a product or service is being offered.
Red Flags
• A small start-up cost is usually accompanied by additional purchasing requirements.
Work-at-Home Jobs and
Business “Opportunity” Schemes
• Individuals used in the marketing for these schemes may give false testimonials.
• The business may have no physical location other than a post office box and a fax machine, making it almost untraceable to an investor.
Multi-level marketing companies can be identified by the following:
• The focus of the program is on the recruitment of new participants, rather than the sale of products to the general public.
• The company emphasizes huge potential earnings, often using testimonials claiming to have earned unbelievable sums.
• The products or services offered by the business are sold for more than fair market value, which may indicate they are simply vehicles for recruitment. Compare the price of the product or service with similar products or services being sold by non-MLM companies. Ask yourself, who would purchase the product or service if they were not interested in joining the program?
Protect Yourself
Before getting involved in a work-at-home business opportunity, here are a few things to consider:
• Avoid work-at-home jobs that charge an up-front fee or any offer on a telephone pole.
• Be skeptical about claims regarding income potential in work-at-home ads.14
• Investigate companies you want to deal with by checking with the Better Business Bureau (us.bbb.org) in the area where the business is located.
• Compare the price of the product or service with similar products or services being sold by non-MLM companies. Ask yourself who would purchase the product or service if they were not interested in joining the program?
The business may not yet be registered with the Better Business Bureau. The Bureau sometimes does not receive complaints until after the scam has been completed and the scam artists are gone.
• Be especially cautious when subjected to hard pressure sales or “pep rally” type sign-up sessions.
• Use extra care when considering investing in a business opportunity. Do not invest unless you are satisfied that the opportunity is genuine and the business can be validated.
• Always meet personally with representatives of the company, view the physical location of the company and verify the actual earning potential.
• If you purchase a business opportunity, carefully evaluate all subsequent offers of upgrades and enhancements. Be prepared to cut your losses once you begin to suspect a problem.
• With multi-level marketers, determine how many individuals are participating in the program and the average amount of money made by each participant. Could you make any money if you only sold the products and did not recruit any new salespeople to the program?
• Never invest more than you can afford to lose. Speak with a professional financial advisor before making any large invest­ments.
Terry Goddard Warns Consumers About Text Message Scam
(Phoenix, Ariz. – April 9, 2008)
Attorney General Terry Goddard today warned consumers about the latest “phishing” scam using text messaging. The scam is a variation on traditional “phishing,” which involves scammers searching for personal identifying or financial information by sending phony emails.
The text message scam works like this: A consumer receives a text message stating that a bank account has been suspended. The consumer is provided a phone number to call to “reactivate” the account. When the phone number is called, a recorded message asks the person to enter his or her bank account number. The text messages have falsely claimed to be from various banks and credit agencies in the state, such as Arizona Central Credit Union. This is a scam! These text messages are fraudulent and are an attempt to steal personal identifying and financial information.
(For the full version of this Scam Alert visit www.azag.gov)16 17
Certified check fraud is a growing area for scam artists. There are several versions of this scam circulating in Arizona. The initial contact can come through an unsolicited telephone call, over the Internet or through the mail. One version of the scam is to include a check (most of the time a cashier’s check) with a prize notice. The notice says that the consumer has won a prize, but must pay a sub­stantial “tax” or “administrative fee.” The scam artist tells the con­sumer that the enclosed cashier’s check comes out of the winnings and will cover the charges. The check looks real, but is not.
In a different twist, the scam artist may pose as a “buyer” for an item over the Internet. The scam artist offers to pay with a U.S. bank cashier’s check. Once the offer is accepted, the “buyer” makes some excuse for sending a cashier’s check that is more than the cost of the item and wants the seller to send the excess money back to the scam artist. The cashier’s check is counterfeit, but it takes the bank several days to discover this. In the meantime, the consumer thinks they received a good check and sends the item as well as the “extra” cash back to the scam artist.
Another variation is the “mystery shopper” scheme where consumers are approached to be “mystery” or “secret” shoppers. Consumers believe they are being hired to evaluate the effectiveness of a money transfer service. The scam artist sends the consumer a cashier’s check. The consumer is instructed to cash the check at their bank and then visit a large retailer that offers money transfer services. The consumer is told to pretend to be a customer wiring money to a relative in another country. The consumer is often instructed to wire most of the money and keep the rest as payment for acting as a “mystery shopper.”
Certified Check Fraud
In all of these situations, the certified check looks real, but it is not. The bank notifies the seller that the cashier’s check is coun­terfeit and the consumer is responsible for returning the money to the bank.
Red Flags
• Instructions by the sender to deposit the check and then wire money back to a third party. There is usually no legitimate rea­son for someone who is giving you money to ask for money to be wired back.
• Cashier’s or certified check made out for several hundred or even several thousand dollars more than the purchase amount of the product, despite the authentic looking logos from well known corporations and banks.
Protect Yourself
• Use caution if cashing or depositing a cashier’s check from an unknown source. Consumers are responsible for deposited checks. When a check bounces, the bank deducts the amount originally credited to the account. If there is not enough money to cover it, the bank may take money from other accounts.
• Consumers cannot rely on the fact that the check was accept­ed for deposit by their financial institution as evidence of the check’s authenticity. The check must go back to the originating bank to clear. This process can take several days and, in the case of an elaborate counterfeit, may take a few weeks. Ask your financial institution about its policy regarding counterfeit checks. 18
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One of the most contemptible forms of fraud is charity fraud. Scam artists pose as charitable fundraisers in order to get your money. Even legitimate fundraisers should be asked certain questions to ensure that you are not falling victim to swindlers.
Paid Fundraisers
Some legitimate charities pay professional fundraisers to handle large-scale mailings, telephone drives, and other solicitations rather than their own paid staff or volunteers. Professional fundraisers are in business to make money and can legally keep a portion of the money they collect. If you are solicited for a donation, ask if the caller is a paid fundraiser and what percentage of your donation the fundraiser will keep. If you are not comfortable with the amount, you may decide to consider other options for donating.
In Arizona, paid fundraisers (also called contracted fundraisers) must register with the Secretary of State’s Office (www.azsos.gov). They must file their contracts with the charities so that you can find out more about them. Arizona law requires paid fundraisers, whether they contact you by phone or mail, to:
• Tell you that they are for-profit solicitors who are either asking for money for a charity or for a fundraiser working for the charity.
• Tell you the legal name of the charity or the paid fundraiser on whose behalf they are asking for money.
• Tell you their true legal names.
• Tell you that the purpose of the call (or letter) is to raise money for charities.
Charity Fraud and Scams
Red Flags
• Names that closely resemble those of legitimate organizations.
• Organizations that use meaningless terms to suggest they are tax-exempt charities. For example, the fact that an organization has a “tax I.D. number” does not mean it is a charity.
• Guaranteed sweepstakes winnings in exchange for a contribution. 20 21
Protect Yourself
• Ask for written information, including the charity’s name, address and telephone number, as well as how your donation will be dis­tributed.
• Know the difference between “tax-exempt” and “tax deductible.” Tax-exempt means the organization doesn’t have to pay taxes. Tax-deductible means you can deduct your contribution from
your federal income tax return. Even though an organization is
tax-exempt, your contribution may not be tax deductible.
• Avoid cash gifts that can be lost or stolen. For security and tax record purposes, it is best to pay by check or credit card.
• If you want to be truly safe, simply decline all pitches from unfamiliar charities. There are always charities in your area that need donations. Do your own research and contact one of them directly and ask how you can help.
• Before you donate, check out the charity with the Arizona Secretary of State’s Office (www.azsos.gov) and the Better Business Bureau (us.bbb.org) or one of the Web sites with information on nonprofit and charitable organizations, such
as GuideStar (www.guidestar.org) or Charity Navigator
(www.charitynavigator.org). The Secretary of State can tell you if a charity or fundraiser is registered and can also look at the contract the charity has signed and tell you what percentage of the donation goes to the charity and what the fundraiser keeps for profit.
Where to Complain about a Charity or Fundraiser
If you believe an organization may not be operating for charitable pur­poses or making misleading solicitations, contact the Arizona Attorney General’s Office and file a Consumer Complaint (www.azag.gov).
Terry Goddard Warns Of Scam Soliciting Donations for Veterans
(Phoenix, Ariz. – May 18, 2007)
Attorney General Terry Goddard today warned consumers to be wary of callers claiming to be from Arizona Veterans Hospital or Veterans Services asking for donations over the telephone.
The Attorney General’s Office has received information that individuals claiming to be associated with the hospital or veterans group are soliciting donations over the telephone to make food baskets for veterans. This is a scam! The Carl T. Hayden VA Medical Center Hospital and the Arizona State Veterans Home do not solicit over the telephone and are not collecting money for food baskets.
(For the full version of this Scam Alert visit www.azag.gov)22 23
As our use of the Internet continues to grow, so do the possibilities of Internet consumer fraud. Almost all of the scams discussed in this guide – from deceptive automobile advertising to promotion of fake business “opportunities” – have been promoted online. The Internet itself has generated a new breed of scams. Here are some things to watch out for:
• Internet auctions. Internet auction Web sites offer con­sumers the ability to purchase goods from around the world. Unfortunately, some sellers fail to deliver what they promise. In addition, some scam artists use information from a legitimate Web site to lure buyers into a fraudulent transaction, such as, request­ing payment from the buyer, but never delivering the goods.
• Pop up ads. “Pop ups” are the small windows that open auto­matically on your computer screen as you work or surf the Internet. Some pop ups advertise goods or services from legiti­mate companies, but others may be fraudulent. Watch out for pop ups that ask you to provide personal information – this may be a form of “phishing” that could put you at risk for identity theft. If the pop up congratulates you on having won millions of dollars and claims it is not a scam, you can be sure that it is.
• Spam. Unwanted emails crowd our in-boxes. You may have given your email address to one person or Web site, only to find that your address has been sold or “harvested” to a marketing company. Spam email may be an annoying advertisement from a legitimate company or it may be a scam. Watch out for spam emails promoting chain letters (which are illegal if they involve money or valuable items and promise big returns), work-at-home schemes guaranteeing easy money or weight loss claims (often with false testimonials). Fight spam by complaining to the Federal Trade Commission (www.ftc.gov).
Internet Auctions and Fraud
Red Flags
• Emails or pop up ads that make unrealistic claims.
• Sellers who insist that you pay for a “free” gift.
• Unsolicited offers by email that appear to represent a trusted company.
• Product advertisements that lack specifications or adequate descriptions. Viewing a product on the screen can present dif­ferent challenges than seeing it in the store.24
25
Protect Yourself
• Know your merchant. Be familiar with the name and reputation of companies with which you are dealing.
• When ordering online, use a reputable third party escrow ser­vice, like PayPal, or at the very least, pay with a credit card to make the purchase. This way you can dispute the charge, if ser­vices are not rendered.
• Protect your privacy when purchasing goods through an online auction site. Never give your Social Security number or driver’s license information to a seller. (Be cautious if you are asked to supply personal information, not needed to make a purchase.
• Make sure the company or individual with whom you are doing business is legitimate. Send a “test” email to see if the email address is active and try to obtain a physical address rather than merely a post office box. Try to find a phone number for the seller and call the number to see if it is correct and working. Research the seller by checking with the Better Business Bureau (us.bbb.org), using an Internet search engine, or by checking government and business Web sites.
• To reduce pop up ads, learn how to use a pop up blocker on your computer. (Most Web Browsers include one, or a variety of options are available for free.)
• To reduce spam, guard the privacy of your email address. Consider using one email address for personal email communications and another for public purposes such as for electronic mailing lists or on Web sites.
• Complain about spam to the FTC (www.ftc.gov) or to your own Internet Service Provider. Include the full email header in your complaint.
• Keep good records - print copies.
Terry Goddard Warns of Phone Scam Promising Financial Grants
(Phoenix, Ariz. – Oct. 16, 2007)
Attorney General Terry Goddard is warning consum­ers of a phone scam offering phony financial grants.
The Attorney General’s Office has learned that Arizonans are receiving phone calls from scam artists posing as reputable grant foundations. Consumers are told that they are eligible to receive a grant, often thousands of dollars, either because they are a female small business owner or a senior. Consumers are asked multiple “pre-screen­ing” questions to determine eligibility for the grant. Upon approval, they are told they must pay a large sum of money up front as well as a finder’s fee. In return for these fees, they are promised the grant. This is a scam! These phone calls are fraudulent and are an attempt to gather personal information that could be used to facilitate identity theft.
(For the full version of this Scam Alert visit www.azag.gov)26 27
Identity theft is when someone fraudulently uses your personal identi­fying information to obtain credit, take out a loan, open accounts, get identification or numerous other things that involve pretending to be you. It is a very serious crime that can cause severe damage to your financial well-being if not taken care of promptly. People can spend months and thousands of dollars repairing the damage done to their credit history and good name by an identity thief. Even scarier, some cases of identity theft are connected to more serious crimes that may lead law enforcement to suspect you of a crime you did not commit. For more information, the Attorney General’s Office has a separate publication entitled Identity Theft Repair Kit that is available on our Web site at www.azag.gov.
Red Flags
• Failure to receive bills or other mail. A missing statement could mean an identity thief has taken over your account and changed your billing address to cover his tracks.
• Receiving credit cards for which you didn’t apply.
• Being denied credit or being offered less favorable credit terms, like a high interest rate, for no apparent reason.
Protect Yourself
• Guard your mail from theft. Instead of leaving your mail to be picked up in an unlocked mailbox, take it to the post office or leave it in a post office collection box. Try not to leave mail in your mailbox overnight. Consider installing a mailbox with a lock.
Identity Theft
• Place passwords on your credit card, bank and phone accounts, while avoiding using easily available information like your moth­er’s maiden name or birthday.
• Shred documents such as credit card offers and old bank state­ments rather than simply throwing them in the trash.
• Do not carry your Social Security Card on you.
• Check your credit report. Each of the major nationwide consumer reporting companies is required to provide you
with a free copy of your credit report, at your request, once every 12 months. To order your free annual credit report
from one or all the consumer reporting companies, visit
www.annualcreditreport.com or call 877.322.8228. You may also order your credit report by contacting any of the following credit reporting agencies:
Equifax
www.equifax.com
P.O. Box 740256
Atlanta, GA 30374
888.766.0008
Experian
www.experian.com
P.O. Box 9532
Allen, TX 75013
888.EXPERIAN (397.3742)
TransUnion
www.transunion.com
P.O. Box 6790
Fullerton, CA 92834
800.680.728928 29
• Place a security freeze on your credit report. Arizona’s security freeze law (ARS § 44-1695) allows consumers to place a security freeze on their credit report. A freeze prevents credit bureaus from releasing credit information without the consumer’s express permission. Businesses typically check credit histories before issuing credit or opening new accounts, so a credit freeze will prevent new credit accounts from being opened in the consumer’s name until the freeze is lifted. To place a freeze in Arizona, you must contact each of the three major credit reporting agencies. Arizona law allows a reporting agency to charge $5 per consumer to place a security freeze. There is also a $5 fee each time you temporarily lift or remove a security freeze. There are no fees if you provide proof that you are a victim of identity theft. To prove you are a victim, you must send a valid copy of a police report document showing your identity theft complaint. You can contact each consumer reporting agency for specific instructions on placing a security freeze.
• Do your homework before purchasing identity theft protection services. Identity theft protection services such as credit-report monitoring, fraud alerts, identity theft insurance and help for victims of identity theft are all available for a fee. However, you can do much of what these services provide for free. The Attorney General’s Office cannot vouch for the reliability or quality of any specific services or products, so be sure to check the track record of companies with the Better Business Bureau (us.bbb.org).30 31
If you think you are a Victim of Identity Theft
• Acting quickly is the best way to make sure this crime does not get out of control. Place a fraud alert on your credit reports by contacting the toll-free number of any of the three consumer reporting companies listed. Once you place the fraud alert in your file, you are entitled to order free copies of your credit reports. When you receive your reports, review them carefully and look for signs of suspicious activity, like accounts you didn’t open.
• Close the accounts that you know, or believe, have been tampered with or opened fraudulently.
• File a report with your local police department where you believe the theft took place. Make sure to get a copy of the report, as it can serve as “proof” of the crime when you are dealing with creditors.
• File a complaint with the Federal Trade Commission (www.ftc.gov) by calling 877.438.4338 (ID Theft Hotline).
Beware of “Grandparent” Scam
(Phoenix, Ariz. - October 16, 2008)
Attorney General Terry Goddard today warned seniors to be cautious if they receive telephone calls from someone who claims to be their grandchild and requests money for an urgent situa­tion. The Attorney General’s Office has received informa­tion that the “grandparent scam” has made it to Arizona.
In this scam, the fraud artist calls an elderly person and poses as their grandchild. The caller may say something like, “Grandma, I am so glad I reached you” or “Grandpa, it’s me, your favorite grandchild calling.” The caller waits for the grandparent to say something like, “Jimmy, is that you?” The caller will agree and state that he or she has either been in a bad accident or is in some type of trouble and needs money immediately. The caller then asks that the money be sent via money order or through a wire service such as MoneyGram or Western Union.
(For the full version of this Scam Alert visit www.azag.gov)32 33
Predatory loans and abusive lending practices are a common prob­lem for Arizona homebuyers and homeowners refinancing their mortgage. Predatory lending may occur when you are buying a home, refinancing a mortgage, or obtaining a home equity loan. Predatory lenders take advantage of borrowers who find themselves in difficult financial situations and who may lack the knowledge of where to look for hidden costs and fees in a loan transaction. In these types of transactions, predatory lenders may charge far more in points, fees, and other costs than justified by the borrower’s cred­it score and/or make loans that are difficult or impossible to repay. Another predatory loan practice is to promise the borrower a certain fixed rate and then, at the last minute, inform the borrower that he or she only qualifies for a higher rate or an adjustable rate. Those practices can lead to the loss of a consumer’s most important pos­session – their home – or years of unnecessary expenses.
Red Flags
• The loan has a limited low rate but can adjust upward after two or three years.
• The loan documents reflect an interest rate well above the market average; points and fees exceed six percent of the loan’s principal amount.
• The lender rushes you through the loan application and does not provide clear answers to your questions or explain the documents you are being asked to sign.
• The lender asks you to exaggerate your income to qualify for a larger loan.
• The lender suggests you take out a loan for more than the property is worth.
• The lender offers you loan terms that are not as good as originally promised.
Mortgage Foreclosure “Rescue” Schemes
• The lender promises cash back after the loan closes, but then most or all of it is eaten up by fees.
• There is a large penalty for loan payoff more than two years after the loan has closed.
• The lender tells you the Good Faith Estimate is inaccurate or is unwilling to give you one.
• There are unreasonably high fees and costs, such as high loan origination or underwriting fees, broker fees, and transaction and closing costs.
• The lender promises that you will be able to refinance into a better loan.
• The lender tells you that it will waive a prepayment penalty without putting it in the loan documents.
• Lenders seek you out by phone or mail.
Protect Yourself
• Never agree to a loan that you cannot afford to pay, including principal, interest, taxes, and insurance.
• Do research. Check the current mortgage rate for the loan term you want in the financial section of the newspaper or on the Internet.
• Shop around. You can often do better than the first offer.
• Know your credit score. You can obtain a free copy of your credit report by contacting a centralized source at www.annualcred­itreport.com or 877.322.8228. There are three different compa­nies that will each provide one report free of charge in a twelve month period.
• Contact the Arizona Department of Financial Institutions
(www.azdfi.gov) to determine if the loan company is a licensed financial lender and whether it has a disciplinary record.34 35
Phony Foreclosure “Rescue” Schemes
Phony “mortgage rescue” and “home foreclosure prevention” schemes are a rapidly growing problem in Arizona. Desperate home owners who have fallen behind on their mortgage payments and are on the verge of foreclosure may turn to these companies hoping to prevent the loss of their home. Be very careful. These schemes are designed to take your home and steal any equity you have built up. In one common foreclosure prevention scheme, the “rescue compa­ny” will lend the homeowner money (at high interest rates) to make back-payments owed to the mortgage lender. The homeowner must agree to make monthly payments to the rescue company that includes the original mortgage payment, plus a payment on the new loan. The homeowner also will be required to sign a deed transfer­ring the property to the rescue company. The homeowner ends up renting the home that they formerly held title to. If the homeowner fails to make rent payments on time, the rescue company evicts the former homeowner. All rights and equity in the home have been lost.
Red Flags
• The “rescue company” requires that you sign a deed transfer­ring your property to them and promises that once you have caught up with the past due mortgage payments, your home will be transferred back to you.
• The “rescue company” demands an up-front fee to negotiate with your lender.
• The “rescue company” tells you to sign over the deed to your home so it can work with your mortgage company to “save” your home from foreclosure.
• You are required to pay a “service fee” to locate a lender or buyer for your home.
• Understand that most loan terms are negotiable, including inter­est rate, choice of fixed or variable interest, length (term) of loan, prepayment penalty, points and fees.
• Do not borrow money unless you understand all of the loan terms. How much are you borrowing? How much will you pay each month? How long will you have to make payments? Focusing on only one term, such as monthly payment, may get you in trouble.
• Some lenders require the borrower to pay a penalty if the loan is paid off early. This “pre-payment penalty” may make it difficult to refinance to a lower interest rate. A loan with a prepayment penalty should have a lower interest rate than a loan without such a penalty. If you decide to allow a pre-payment penalty because you do not expect to refinance soon, negotiate so it lasts only for the first year or two of the loan.
• Ask for copies of the loan documents in advance so you have plenty of time to read them.
• Read every document carefully. Never sign a mortgage docu­ment that has blank spaces.
• Study the Good Faith Estimate carefully.
• If your current mortgage payments include insurance and tax payments, make sure to include those costs when comparing your current mortgage payments to a possible new loan pay­ment. Many times, the new lender leaves out insurance and taxes to make the new loan look better.
• Just because you have applied for a home loan does not mean you have to go through with it. In the case of refinances and home equity loans, EVEN AFTER YOU SIGN THE LOAN PAPERS, YOU HAVE THREE DAYS TO BACK OUT. (15 U.S.C. § 1635(a) [Truth in Lending Act].)
• Complaints about lender practices should be directed to the Arizona Department of Financial Institutions (www.azdfi.gov), the U.S. Comptroller of the Currency (www.occ.treas.gov) or the Arizona Attorney General’s Office (www.azag.gov).36 37
• The “rescue company” offering to save your home from foreclo­sure rushes you through the transaction and urges you to sign documents immediately.
• The “rescue company” promises to personally pay your past due mortgage payments directly to the original lender.
• The “rescue company” forbids you to contact your original mortgage company.
Protect Yourself
• Never sign over the deed to your home as part of a foreclosure avoidance transaction. A deed should be signed over only if you intend to sell the home for a fair price.
• Contact the Arizona Department of Financial Institutions
(www.azdfi.gov) to determine if the company you are dealing with is a licensed financial lender and, if so, whether the lender has a disciplinary record.
• Before signing any “rescue” documents, you should consult either:
• an attorney
• a financial advisor
• a non-profit mortgage counseling agency, a HUD-certified counselor or
• a knowledgeable family member
• Read every document carefully. Do not sign contracts or docu­ments that have blank spaces.
• Make the monthly mortgage payments directly to your original lender. Do not allow another person to make payments on your behalf.
• When behind in your mortgage payments, contact your lender first. Often a payment plan can be worked out that allows you to keep your home while working through financial problems.
For more information on resources to help consumers avoid foreclosure, visit our Web site at www.azag.gov.
Terry Goddard
Warns of Fraudulent Mortgage ‘Assistance’ Businesses
(Phoenix, Ariz. – Dec. 8, 2008)
Arizona Attorney General Terry Goddard today warned homeowners facing foreclo­sure to be careful when approached by persons offer­ing to help with loan modifi­cations or other foreclosure-prevention techniques.
The Attorney General’s Office has experienced a recent increase in complaints from consumers who have been contacted by individuals claiming to have “connec­tions” and expertise in nego­tiating with mortgage lenders to reduce consumers’ monthly payments and/or prevent foreclosure. These individuals charge consumers high upfront fees and say they can modify mortgage terms to make them more affordable.
(For the full version of this Scam Alert visit www.azag.gov)38 39
Consumers who find themselves strapped financially sometimes turn to payday loans, tax return anticipation loan, or car title loans as a quick source of cash. Unfortunately, these loans often result in an endless cycle of debt for the consumer.
Payday loans, also called deferred presentment, cash advance or check advance loans, are short term loans usually at a high interest rate that become due on the borrower’s next payday. Before getting the funds, the borrower writes a check for the amount of the loan, plus the company’s lending fee. The company then gives the bor­rower cash in the amount of the check, minus the fee, and does not collect on the check until the next payday.
Lenders often charge fees that translate into outrageous annual percentage rates. For example, a two week $100 loan for a $15 fee turns out to be a loan with an annual percentage rate of 390%. Over a year, the borrower would pay an additional $390 over the $100 loan. Compare that to what a borrower would pay on a high-interest credit card with an annual interest rate of 24%. Over a year, the borrower would pay an additional $24 over the $100 loan. That’s a big difference!
Tax return anticipation loans (also called RAL) are secured by and repaid from a pending income tax refund. The proceeds of the loan may be available a few days faster than the tax refund, but consumers can expect to pay high fees to borrow their own money. According to a recent report by the Consumer Federation of America and the National Consumer Law Center, RAL loans cost $100, on average, depending on the size of the refund, in addition
Payday and Other “Quick Cash” Loansto other extra fees for tax preparation and assorted services. The interest rate on “RAL” loans could range from about 40% to over 700% APR (annual percentage rate). A refund anticipation loan is risky because it must be repaid even if the taxpayer’s refund is denied, less than expected, or frozen.
Auto title loans are also short term, high cost loans that can result in even more debt than the consumer initially owed or in the loss of the borrower’s car or truck. With an auto title loan, the consumer borrows money and promises to repay the loan in a short time, often 30 days later. As security or backing for the loan, the con­sumer gives the lender title to the consumer’s vehicle, sometimes also handing over a duplicate set of keys. If the borrower does not repay the loan on the due date, the loans are frequently rolled over for an additional fee. If the borrower still cannot repay the loan, the lender takes the vehicle. Thus, the borrower may lose a car that may be worth over $10,000 as a result of a $2,000 loan. In addition, the borrower is out whatever payments and interest were paid before the loan was in default and the car repossessed.
Red Flags
• Triple digit interest rate. Payday loans carry very low risk of loss, but lenders typically charge fees equal to 400% APR and higher.
• Single balloon payment, usually due in two weeks, unlike most consumer debt that allows for partial installment payments.
• No consideration of borrower’s ability to repay.40
41
Protect Yourself
• Under the Truth in Lending Act, you are entitled to know the cost of any type of credit applied for and to receive the informa­tion in writing, including the Annual Percentage Rate and the dollar amount of finance charges. Read this material carefully before you enter into the loan.
• Look to alternative sources for loans that do not carry such high interest rates or fees, such as credit unions, community based organizations, your employer, family or friends, or a cash advance on your credit card.
• Make sure that you can realistically pay the loan back when it becomes due before agreeing to its terms.
• To avoid taking out a tax refund anticipation loan to shorten the time before the refund is available, file your tax return electroni­cally (E-file) with the refund deposited directly into your bank account. You should receive your refund in seven to ten busi­ness days.
• Seek help from a reputable consumer credit counseling service.
Terry Goddard Warns Consumers About Internet Loan Scam
(Phoenix, Ariz. – Jan. 22, 2007)
Attorney General Terry Goddard today warned Arizona consumers about applying for personal loans over the Internet. Arizona consumers have reported to the Attorney General’s Office a scam offering personal loans to help them meet their financial obligations. “These scams are sophisticated because they take a victim through a ‘loan approval process,’ but these ‘lenders’ are scam artists looking to get your money,” Goddard said. “Once they have your money, they may disappear along with the Web site and phone numbers.”
(For the full version of this Scam Alert visit www.azag.gov)42 43
Phony lottery or sweepstakes prize notifications are among the most
successful scams in history. They can come through a telemarketing
call or over the Internet, but usually come by mail.
International Lottery Scam
Consumers receive a notice that they have won a lottery or other
type of prize. Usually the consumer never entered or heard of the
contest or lottery they have “won.” The scheme requires a small
payment for “processing” or “taxes” or “conversion of currency.”
The prize notification often advises the “winner” to keep the award
a secret to protect the winnings from the Internal Revenue Service.
Sometimes the prize letter requests that the consumer provide bank
account information so the prize money can be wired directly to
the consumer’s account. With this information, the scammer gains
access to the consumer’s bank account and may be able to transfer
money out of that account illegally.
Nigerian Letter Scam
If you have an email account or fax machine, then you have prob-ably
received some version of what is often referred to as a Nigerian
scam letter. The Nigerian letter scam is another twist on the prize
notification scam. The letter is circulated via fax, email or regular mail
and purports to come from all sorts of locations, including Nigeria,
Laos, South Africa, Europe, and Canada. The scam artist’s creative
stories seem endless. In one email, it is a supposedly high-ranking
government official supposedly contacting you, while in another
email, it is a bank employee notifying you that you are the next of kin
to a dead millionaire. The scam artist requests help in transferring
millions of dollars to the United States.
Prize Notification Scams
The scammer promises to give a
percentage of the money transferred, typically 20
to 30 percent, as payment for providing an account to receive the
funds. The scam artist typically requests bank account information
to facilitate sending the alleged money and may ask for a “good
faith” payment up front. Obtaining advance fees or personal financial
information (i.e., bank account numbers) is the scammer’s ultimate
goal. The victim gets nothing.
Red Flags
• Requests to wire or mail money to cover administrative fees,
taxes or legal fees involved in processing your winnings. A
legitimate lottery would deduct such expenses from your win-nings,
before sending them to you.
• Any attempt to prod or threaten you into sending money imme-diately
or the prize will be lost.
• Requests to send someone to your house to pick up the money.
• Requests for bank account information so your prize can be
deposited directly into your account.
• After declining the offer, you continue to get calls offering to
lower the fees required to claim your prize in an attempt to get
money from you.
44 45
• A foreign national asking for your help to transfer money into your American bank account in exchange for a share of the money. These schemes often include a tragic story designed to foster sympathy and a huge promised benefit.
Protect Yourself
• Never send money to “claim your prize.”
• Be suspicious of junk mail solicitations.
• Hang up on persistent callers. If calls become threatening, notify law enforcement.
• If you have lost money, report it at once. Contact the Arizona Attorney General’s Office (www.azag.gov). Once you have fallen victim to one scam, it is likely you will be targeted for future scams.
• NEVER give personal financial information, such as your bank account number.
• If you or someone you know has been contacted to participate in an Advanced Fee Scam from a foreign country (such as the Nigerian letter scam), contact the U.S. Secret Service (www.ustreas.gov/usss/).
Terry Goddard Warns Consumers of Social Security Scam
(Phoenix, Ariz. – April 19, 2007)
Attorney General Terry Goddard today warned consumers about a Social Security scam that is target­ing Arizona. Consumers are receiving calls from scam artists claiming to be from the Social Security Administration. When these people call, they say that they need to verify the consumer’s Social Security number, and ask the consumer to provide the first three digits of their Social Security number. Once the consumer gives the first three digits, the caller then tries to guess the next two digits, and in doing so, often prompts the consumer to provide those numbers.
This is a scam. The Social Security Administration will never call to confirm a Social Security number. If you receive such a call, do not give out any part of your Social Security number.
(For the full version of this Scam Alert visit www.azag.gov)46 47
Every year, thousands of consumers lose money to telemarketing con artists. Some companies that sell items over the phone are legitimate, but many are not. Be especially suspicious when anyone attempts to sell you something over the telephone.
The Federal Trade Commission’s (FTC) Do Not Call Registry allows you to stop getting telemarketing calls at home. You can register by calling 888.382.1222 (TTY 866.290.4236) from the number you wish to register. You may also register up to three phone numbers at a time online at www.donotcall.gov. You can regis­ter cell phone numbers as well as land lines on the Do Not Call Registry.
Some callers are not subject to the Do Not Call Registry, such as charities, political organizations, telephone surveyors, or businesses with whom you have an established relationship. If you receive a telemarketing call after you are registered on the Do Not Call list, get the company’s name or telephone number and then file a complaint with the Federal Trade Commission (FTC) at www.donotcall.gov.
Arizona’s telephone solicitations statute (A.R.S. §§ 44-1271 through 44-1282) require covered telemarketing companies to file a registra­tion statement with the Secretary of State (www.azsos.gov) and post a bond with the State Treasurer’s Office (www.aztreasury.gov) before they can solicit customers over the telephone. Arizona law also requires all telemarketing companies to tell their customers, both orally and in writing, that they have the right to cancel their order within three days after receiving the merchandise or any gift, bonus, prize or award.
Telemarketing Rip-offs
In some instances, credit card companies will issue a credit to your account if the telemarketing company is not legitimate. It is impor­tant to contact your credit card company as soon as you realize there is a problem, as they will issue a credit only for a limited time.
Red Flags
• “Act now” or the offer will expire.
• You have won a “free” gift, vacation or prize, but you must pay for “shipping and handling” or other charges before you get your prize.
• Insistence on an in-home presentation or product demonstra­tion.
• Insistence on payment in cash or that your payment must be picked up by a courier.
• Statements that it is not necessary to check on the company with the Better Business Bureau (us.bbb.org), a consumer pro­tection agency or an attorney.
• Refusal to send information about the offer in writing for you
to review.
Protect Yourself
• Place your phone number on the Do Not Call Registry
(www.donotcall.gov).
• If it sounds too good to be true, it probably is.
• Screen your calls. Let an answering machine pick up calls from unknown callers. Most telemarketers will not leave messages.
If a telemarketer does leave a message, you do not have to call back.48 49
• You can hang up!
• Never give out your bank account information or Social Security number to a caller you do not know.
• Never agree to let someone pick up your check or other form of payment.
• If the deal sounds good but you still have questions, ask the company for information in writing before paying for any goods or services. A legitimate company will be happy to oblige.
• Do your own research before buying from a telemarketer. Check with the Better Business Bureau (www.us.bbb.org) to see if there are complaints against the company. Use an online search engine to gather additional information about the company and spot potential red flags.
Consumer Advisory:
Tips on Spotting
Summer Travel Scams
(Phoenix, Ariz. – July 12, 2007)
Summer may already be half over, but there is still time to take that well-earned vacation. Attorney General Terry Goddard encourages consumers to make travel plans carefully and be aware of potential travel scams. The Attorney General’s Office has received information from Arizona travelers reaching their destination, only to find that the lodging arrangements they made were not legitimate. Travelers often lose their advance payments and have no place to stay.
(For the full version of this Scam Alert visit www.azag.gov)50 51
Arizona Agencies
and Organizations
Arizona Attorney General’s Office
1275 West Washington Street
Phoenix, AZ 85007
www.azag.gov
Consumer Information
and Complaints
602.542.5763 (Phoenix)
520.628.6504 (Tucson)
800.352.8431 (In-State Toll Free outside of Maricopa and Pima counties)
email: consumerinfo@azag.gov
Identity Theft Help Line
602.542.2145 (Phoenix)
800.352.8431 (Outside
Maricopa and Pima Counties)
email: identitytheft@azag.gov
Crime, Fraud & Victim Resource Center
602.542.2123 (Phoenix) 800.352.8431 (Outside Maricopa and Pima Counties)
The Better Business Bureau of Central/Northern/Western Arizona
4428 North 12th Street
Phoenix, AZ 85014
602.264.1721
877.291.6222
www.us.bbb.org
www.arizonabbb.org
The Better Business Bureau of Southern Arizona
434 South Williams Boulevard
Suite 102
Tucson, AZ 85711
520.888.5353
800.696.2827 (Outside Metro
Tucson)
www.us.bbb.org
www.tucson.bbb.org
Arizona Corporation Commission
1300 West Washington Street
1st Floor
Phoenix, AZ 85007
602.542.3026 (Phoenix)
520.628.6560 (Tucson)
800.345.5819 (In-State Toll Free)
www.azcc.gov
Arizona Department of Financial Institutions
2910 North 44th Street
Suite 310
Phoenix, AZ 85018
602.255.4421
800.544.0708 (In-State Toll Free)
www.azdfi.gov
Resource Page
Arizona Department of Housing
1110 West Washington Street
Suite 310
Phoenix, AZ 85007
602.771.1000
www.housingaz.com
Arizona Foreclosure Helpline
877.448.1211
Arizona Department of Insurance
2910 North 44th Street
Suite 210
Phoenix, AZ 85018
602.364.2499 (Phoenix)
520.628.6370 (Tucson)
800.325.2548 (In-State Toll Free)
www.id.state.az.us
Arizona Department of Public Safety
2102 West Encanto Boulevard
Phoenix, AZ 85009
602.223.2000
www.azdps.gov
Arizona Registrar of Contractors
3838 N. Central Avenue
Suite 400
Phoenix, AZ 85012
602.542.1525
888.271.9286 (In-State Toll Free)
602.542.1588 (TTY)
www.azroc.gov
Arizona Department of Revenue
1600 West Monroe
Phoenix, AZ 85007
602.716.7810
www.azdor.gov
Arizona Saves
6633 North Black Canyon Highway
2nd Floor
Phoenix, AZ 85015
602.246.3500
877.989.3500 (In-State Toll Free)
email: info@arizonasaves.org
www.arizonasaves.org
Arizona Secretary of State
1700 West Washington Street
7th Floor
Phoenix, AZ 85007
602.542.4285 (Phoenix)
520.628.6583 (Tucson)
800.458.5842 (In-State Toll Free)
www.azsos.gov
Arizona State Legislature
1700 West Washington Street
Phoenix, AZ 85007
602.542.4285 (Phoenix)
520.628.6583 (Tucson)
602.255.8683 (TTY)
www.azleg.gov
Arizona Department of Veterans Services
4141 North 3rd Street
Phoenix, AZ 85012
602.248.1550
www.azdvs.gov52 53
Arizona Department of
Weights and Measures
4425 West Olive
Suite 134
Glendale, AZ 85302
602.771.4920
800.277.6675 (Outside Phoenix
Metro Area)
623.463.9930 (TTY)
www.azdwm.gov
US Government Agencies
U.S. Attorney, District of
Arizona
Two Renaissance Square
40 North Central Avenue
Suite 1200
Phoenix, AZ 85004
602.514.7500 (Phoenix)
520.620.7300 (Tucson)
928.556.0833 (Flagstaff)
928.344.1087 (Yuma)
928.778.0880 (Prescott)
www.usdoj.gov
U.S. Comptroller of the Currency
Customer Assistance Group
1301 McKinney Street
Suite 3450
Houston, TX 77010
email: customer.assistance@occ.treas.gov
www.occ.treas.gov
Consumer Hotline
800.613.6743
Federal Communications Commission (FCC)
445 12th Street, SW
Washington, DC 20554
888.225.5322
888.835.5322 (TTY)
www.fcc.gov
Federal Trade Commission (FTC)
Consumer Response Center
600 Pennsylvania Avenue, NW
Washington, DC 205080
202.326.2222
877.FTC.HELP (382.4357)
866.653.4261 (TTY)
ID Theft Hotline
877.ID.THEFT (438.4338)
www.ftc.gov
Do Not Call Registry
888.382.1222
866.290.2436 (TTY)
www.donotcall.gov
U.S. Department of Housing
and Urban Development (HUD)
1 North Central Avenue
Suite 600
Phoenix, AZ 85004
602.379.7100 (Phoenix)
160 North Stone Avenue
Tucson, AZ 85701
520.670.6000 (Tucson)
www.hud.gov
U.S. Postal Service Inspection Service Criminal Investigations Service Center
ATTN: Mail Fraud
P.O. Box 20666
Phoenix, AZ 85036
877.876.2455
www.usps.com
U.S. Secret Service
602.640.5580 (Phoenix)
520.622.6822 (Tucson)
www.ustreas.gov
Credit Reporting Agencies
For a free annual copy of your
credit report, contact:
877.322.8228
www.annualcreditreport.com
Equifax
P.O. Box 740241
Atlanta, GA 30374
888.766.0008
www.equifax.com
Experian
P.O. Box 9532
Allen, TX 75013
888.EXPERIAN (397.3742)
www.experian.com
TransUnion
P.O. Box 6790
Fullerton, CA 92834
800.680.7289
www.transunion.com
Charitable and Nonprofit Organizations Information
Better Business Bureau
Wise Giving Alliance
4200 Wilson Boulevard, Suite 800
Arlington, VA 22203
703.276.0100
www.give.org
Charity Navigator
1200 MacArther Boulevard
Second Floor
Mahwah, NJ 07430
201.818.1288
www.charitynavigator.com
GuideStar
4801 Courthouse StreetSuite 220
Williamsburg, VA 23188
757.229.4631
email: customerservice@guidestar.org
www.guidestar.org54 55
Media Consumer Advocates
3 On Your Side
5555 North 7th Avenue
Phoenix, AZ 85013
602.207.3470
email: 3oys@azfamily.com
www.azfamily.com
12 for Action
602.260.1212
866.260.1212 (Outside Phoenix
Metro Area)
Monday-Friday, 11am-1pm
Consumer problems are only accepted via telephone
www.azcentral.com
ABC15 Investigators
602.685.6399
investigators@abc15.com
www.abc15.com
CBS 5 Investigates
602.650.5555
5investigates@kpho.com
www.kpho.com
Consumer Reports
www.consumerreports.org
NBC 11-Yuma
928.782.1111
www.kyma.com
NBC 2-Flagstaff
928.526.2232
www.azcentral.com
FOX 11-Tucson
520.770.1123
www.fox11az.com
Terry Goddard Warns Consumers About Rebate Scams
(Phoenix, Ariz. – May 12, 2008)
With the arrival of federal rebates, Attorney General Terry Goddard today reminded consumers to be suspicious phone calls or emails from people claiming to be from the Internal Revenue Service. IRS officials have reported consumers receiving postcards announcing “Rebate Credit!” and emails with the IRS logo seeking Social Security and bank account numbers to complete the processing of the rebate payment. Often recipients are led to believe that failing to provide the information will prevent them from receiving their rebate or refund or even cause them to be audited. Email attachments can also contain spyware that enables the thief to steal victims’ personal and financial information.
(For the full version of this Scam Alert visit www.azag.gov)56 57
Important Information About Consumer Complaints
The Arizona Attorney General has the authority to bring actions alleging violations of the Consumer Fraud Act. Consumer fraud is defined as any deception, false statement, false pretense, false promise or misrepresentation made by a seller or advertiser of merchandise. Concealment, suppression or failure to disclose a material fact may also be considered consumer fraud in certain instances. Merchandise is broadly defined to include any objects, wares, goods, commodities, real estate or intangible items such as services. The Consumer Fraud Act is found at Arizona Revised Statutes (A.R.S.) §§ 44-1521 through 44-1534.
The Attorney General’s Office does not have the authority to represent individual consumers. However, our consumer experts look into every complaint. They provide an opportunity for the business named in the complaint to resolve the dispute voluntarily. If the complaint is not resolved, it is reviewed for further action by our Office. If we file a consumer fraud lawsuit for a matter in which you filed a complaint, you may be named as a victim in our complaint or called as a witness at trial (with your consent). If the Court action is successful, you might be awarded damages by the Court.
If you believe you are the victim of consumer fraud, please file a complaint with all the requested information. Please also send us copies of any documentation to support your complaint (for example, a copy of a contract, phone records, the names and addresses of persons involved). Complaint forms and instructions for filing are on our Web site at www.azag.gov. You may also request a form be mailed to you by contacting the Attorney General’s Consumer Information and Complaints Office in Phoenix at 602.542.5763; in Tucson at 520.628.6504; or outside Maricopa and Pima Counties at 800.352.8431.
To stay ahead of the rapidly changing consumer scams and schemes, please sign
up for Scam Alerts on the Attorney General’s
Web site at www.azag.gov.

Copyright to this resource is held by the creating agency and is provided here for educational purposes only. It may not be downloaded, reproduced or distributed in any format without written permission of the creating agency. Any attempt to circumvent the access controls placed on this file is a violation of United States and international copyright laws, and is subject to criminal prosecution.

1 2
Arizona Attorney General
Terry Goddard
Educating • Protecting • Empowering Arizona Consumers
Arizona
Attorney General’s
Office
1275 West
Washington Street
Phoenix, Arizona 85007
602.542.5025
400 West Congress
South Building
Suite 315
Tucson, Arizona 85701
520.628.6504
Outside the Phoenix
or Tucson metro area
800.352.8431
www.azag.gov
Top 10
Consumer
Scams
Arizona Attorney General’s
Red Flags and Protection Tips
Other publications av
ailable from the Arizona Attorney General’s Office include:• Civil Rights: • Employment Discrimination - Get the Facts • Discrimination in Places of Public Accommodation • Housing Discrimination - Get the Facts • Voting Discrimination• Consumer Guide for Young Adults• Consumers’ Guide to Buying a Car• Identity Theft• Internet Safety Guide for Parents and Teens• Life Care Planning• Predatory Lending• Victims' RightsFor more information,contact:Crime, Fraud & Victim Resource CenterArizona Attorney General’s Office1275 West Washington StreetPhoenix, Arizona 85007602.542.2123 or 800.352.8431communityservices@azag.govSubscribe to the Attorney General’sscam alerts and messages oncurrent issues at www.azag.gov.www.azag.govCrime and FraudPrevention InitiativesThe Attorney General’s Officeincludes Satellite Offices throughout the State and the Fraud Fighter Van. Satellite Offices make it easier for residents to get information on crime prevention, consumer fraud, and civil and victims’ rights issues in their own neighborhoods. Fraud Fighter Volunteers are available to make educational presentations to community groups and distribute materials at local events. A complete list of Satellite Office locations and schedule of events are posted on the Attorney General’s Web site at www.azag.gov. The Fraud Fighter Van is the newest tool to bring services and information to senior centers, libraries and neighborhoods. The Fraud Fighter Van is filled with informa-tion about identity theft, scam alerts, Internet safety and much more.3
1
Message from Attorney General Terry Goddard...............................3
Auto Purchases and Repairs............................................................4
Work-at-Home Jobs and Business “Opportunity” Schemes...........12
Certified Check Fraud.....................................................................16
Charity Fraud and Scams...............................................................18
Internet Auctions and Fraud...........................................................22
Identity Theft..................................................................................26
Mortgage Foreclosure “Rescue” Schemes.....................................32
Payday and Other “Quick Cash” Loans..........................................38
Prize Notification Scams.................................................................42
Telemarketing Rip-offs....................................................................46
Resource Page...............................................................................50
Important Information about Consumer Complaints.......................56
The material in this brochure is not copyrighted. Organizations are encouraged to reprint this booklet or excerpts and do not need to contact the Attorney General’s Office for permission.
Table of Contents
“High-priced loans, ‘phishing’ schemes,
the Nigerian letter scam and variations of the international lottery winner notice have victimized
far too many Arizonans. New scams target our citizens every day.
I want to help consumers stop
scam artists before they strike. Remember, if it sounds too good
to be true, it probably is!”
Arizona Attorney General Terry Goddard2 3
Message from Attorney General
Terry Goddard
January 2009
Fake checks, mortgage rescue schemes, “opportunities” to make $100,000 a year working in your pajamas and variations of the international lottery winner notice have victimized far too many Arizonans. While my Office vigorously enforces the consumer fraud laws, I want to help consumers stop scam artists before they strike. With more information about consumer fraud and available resources, more Arizonans will spot the red flags and protect themselves and their families.
This booklet provides a practical guide to the “Top 10” most common consumer problems and scams reported to the Attorney General’s Office in 2007 and 2008. It is designed to empower consumers so they can avoid becoming a victim. Please review this information carefully. Share it with friends, neighbors and loved ones – anyone who might need it. The “Top 10”, along with other consumer tips, is also available on our Web site at www.azag.gov.
I urge you to report fraudulent activities and hope that this booklet will help you to recognize them. In addition, consumer fraud complaints help the Attorney General’s Office determine which consumer problems are the most serious and provide an invaluable resource in directing our litigation efforts. The Resource Page at the end provides contact information for agencies that can help.
Sincerely,
Terry Goddard
Arizona Attorney General
Hundreds of seniors across the state turned over their junk mail,
which was inspected for scams and fraudulent offers.
“It is through efforts such as Seniors Strike Back
that we learn of patterns of fraud and illegality.”
Arizona Attorney General Terry Goddard4 5
Buying a New or Used Car
Next to a home, an automobile is often the largest purchase con­sumers make. Consumers who are not aware of their rights often make bad deals.
The Attorney General’s Office has a separate publication entitled Consumers’ Guide to Buying a Car: Steer Clear of Trouble! that is available on our Web site at www.azag.gov.
Red Flags
• A salesperson rushes you to sign paperwork without giving you a chance to review the contract terms.
• Advertised minimum trade-in amounts and free gifts. Dealers may raise the price of the car to offset a low value trade-in or the cost of the “gift.”
• A contract that has terms substantially different than what was advertised or what the salesperson promised.
• A salesperson suggests putting false information on your finance application, such as inflating your income. Providing false infor­mation to obtain financing is a crime and you could end up with a contract you cannot afford.
• A salesperson suggests you take the car home before financ­ing is approved. This practice is designed to “lock you in” to a purchase. If you take a newly purchased car home and find out later you will have to pay more than expected for financing, you should be able to get your trade-in back and return the newly purchased car (A.R.S. § 44-1371).
Auto Purchases and Repairs
Protect Yourself
• Do your homework. Get information about car dealers from the Better Business Bureau (us.bbb.org). Research the car’s value before negotiating a price. Look up the value in the Kelley Blue Book (www.kbb.com) or at Edmunds.com (www.edmunds.com).
• Arrange financing with your bank or credit union before car shopping.
• Be skeptical of the claims made in car advertisements and read the fine print carefully. (Save copies!)
• Make sure all promises made by the salesperson or dealership are put in writing and that you get a copy.
• Request a free vehicle history report from the dealer before buying a used car.
• Read all documents and understand all terms before signing a purchase contract. Do not sign contracts with blank spaces.
• Make sure the financing is approved before turning in your trade-in vehicle or accepting the new car.
• If you are buying a used car, have a trusted mechanic inspect it before you buy.
• If you decide to finance through a dealer, negotiate the price first. Once the price is settled, then negotiate the monthly payment.
• With dealer financing, always ask the dealer if the interest rate being offered is their lowest rate, whether the rate includes any profit for the dealer, and if so, how much.
• REMEMBER: Arizona does not have a cooling-off period or three-day right to cancel a car sale.6 7
Extended Warranties and Service Contracts
At the time of purchase, dealers may offer an extended warranty or service contract for an additional cost, but it can be expensive. In fact, extended warranties are often one of the most profitable aspects of car sales. Think carefully before purchasing a service contract. If the car model you have purchased has a record of reliability or you expect to own your car for five years or less, it may not be worthwhile to purchase an extended warranty.
If you are interested in a service contract, remember that cost and coverage vary greatly and may be subject to negotiation. Make sure you receive a copy of the terms and conditions of the contract from the provider.
If you pass on an extended warranty at the time you purchase your car, you may receive notices in the mail years later informing you that your original warranty is about to expire or has expired. These notices may not come from the dealership where you purchased your car, but instead may be sent by an independent service contract provider trying to sell you an extended warranty. Certain providers of service contracts or extended warranties must be registered with the Arizona Department of Insurance. Therefore, before responding to a solicitation, contact the Department of Insurance (www.id.state.az.us) to make sure the extended warranty provider is in compliance with state law.
Arizona’s Lemon Law
New Car: The Arizona Lemon Law (A.R.S. § 44-1261 et seq.) has some specific protections. Consumers should consult the law or an attorney if their new car does not operate in a reasonable manner.8 9
Here are the basics:
The period covered by the Lemon Law is the same as the term of the manufacturer’s warranty or two years or 24,000 miles, which­ever is earlier. The covered period begins on the date the consumer receives the vehicle.
During the covered period, if the manufacturer fails to repair the defect(s) after four attempts, or if the car is out of service by reason of repair for a cumulative total of 30 or more calendar days, the manufacturer must accept return of the car or replace it with a new car (contact your dealer).
Used Car: A used car is covered by the Arizona Used Car Lemon Law (A.R.S. § 44-1267) if a major component breaks within 15 days or 500 miles after the car was purchased, whichever comes first. You have to pay up to $25 for the first two repairs. The recovery for the consumer is limited to the purchase amount paid for the car.
Car Repairs
At some point, your car will need repairs. Knowing how your car operates and familiarizing yourself with the owner’s manual for your car will help you spot problems. It is best to find a trusted mechanic and auto repair shop before your car needs repairs. This will help you avoid making a last-minute or unnecessarily expensive decision.
Terry Goddard Urges Caution on Extended Warranty Offers
(Phoenix, Ariz. – Dec. 5, 2007)
Attorney General Terry Goddard is warning consum­ers to be cautious in review­ing mail or telephone solici­tations to Arizona residents indicating their car warran­ties are about to expire. These solicitations are sent to consumers encouraging them to purchase an extended warranty.
The cards may have names similar to official organiza­tions or government agen­cies and may be stamped with phrases such as “final notice” or “priority level: high” to create a sense of urgency. When consumers call the phone number provided on the card, they may be encouraged to purchase a high-priced extended warranty for their vehicle. In some cases, callers
are told they must make a down payment prior to receiving warranty information from the company.
(For the full version of this Scam Alert visit www.azag.gov)10 11
Red Flags
• Aggressive scare tactics employed by repair shop personnel to pressure customers.
• Refuse to give you a written estimate.
• Failure to provide a warranty on parts and labor.
Protect Yourself
• Ask for car repair recommendations from people you trust. Check with the Better Business Bureau to see if there are any complaints against the repair shop.
• If your car is under warranty, make sure that the repair shop is authorized to provide service for your car’s make and model. Work done by an unauthorized repair shop could void the warranty.
• If possible, get several written quotes from different repair shops before a major repair is done.
• Get a written estimate first. The estimate should identify the problem to be repaired, the parts needed and the anticipated labor charge. Make sure you get a signed copy of the estimate.
• Pay your bill with a credit card, if you can, to give you maximum flexibility to dispute the charge if something goes wrong.
• Prepare for repairs by learning about your vehicle and preventa­tive maintenance, before you experience a problem.
• Test drive your vehicle after having it repaired to make sure the car is fixed to your satisfaction.
• There is no such thing as a “standard warranty” on repairs. Make sure you understand what is covered under your warranty and get it in writing.12 13
In a tight economy, more and more people are turning to work-at-home jobs and “business opportunities” to supplement their income. There are many legitimate companies that offer these opportunities in customer service and other areas. People seeking work-at-home jobs and business opportunities need to be aware of scams that can take advantage of consumers. These schemes all have one thing in common: something must be purchased before work can begin. Envelope stuffing is a common work-at-home scheme. Promoters usually advertise that, for a small fee, they will tell you how to earn money by stuffing envelopes. However, the consumer usually only receives a list of businesses to contact about job opportunities. Assembly work or craft work often requires the investment of hundreds of dollars in equipment and supplies, as well as many hours to produce goods for a company that has promised to buy them.
Multi-level marketing (MLM) companies are another type of business “opportunity” that frequently use the Internet and telemarketing operations to lure participants. MLM businesses claim they are marketing a product, but they are actually marketing a scheme in which earnings are based on the number of new individuals recruited into the program, not on the quality of the product. These companies entice prospective participants with promises that they will have their own business, establish their own work hours and earn enough money to purchase a new car or boat, pay for their children’s education or take a fabulous vacation. Promoters claim these pyramid schemes are legal because a product or service is being offered.
Red Flags
• A small start-up cost is usually accompanied by additional purchasing requirements.
Work-at-Home Jobs and
Business “Opportunity” Schemes
• Individuals used in the marketing for these schemes may give false testimonials.
• The business may have no physical location other than a post office box and a fax machine, making it almost untraceable to an investor.
Multi-level marketing companies can be identified by the following:
• The focus of the program is on the recruitment of new participants, rather than the sale of products to the general public.
• The company emphasizes huge potential earnings, often using testimonials claiming to have earned unbelievable sums.
• The products or services offered by the business are sold for more than fair market value, which may indicate they are simply vehicles for recruitment. Compare the price of the product or service with similar products or services being sold by non-MLM companies. Ask yourself, who would purchase the product or service if they were not interested in joining the program?
Protect Yourself
Before getting involved in a work-at-home business opportunity, here are a few things to consider:
• Avoid work-at-home jobs that charge an up-front fee or any offer on a telephone pole.
• Be skeptical about claims regarding income potential in work-at-home ads.14
• Investigate companies you want to deal with by checking with the Better Business Bureau (us.bbb.org) in the area where the business is located.
• Compare the price of the product or service with similar products or services being sold by non-MLM companies. Ask yourself who would purchase the product or service if they were not interested in joining the program?
The business may not yet be registered with the Better Business Bureau. The Bureau sometimes does not receive complaints until after the scam has been completed and the scam artists are gone.
• Be especially cautious when subjected to hard pressure sales or “pep rally” type sign-up sessions.
• Use extra care when considering investing in a business opportunity. Do not invest unless you are satisfied that the opportunity is genuine and the business can be validated.
• Always meet personally with representatives of the company, view the physical location of the company and verify the actual earning potential.
• If you purchase a business opportunity, carefully evaluate all subsequent offers of upgrades and enhancements. Be prepared to cut your losses once you begin to suspect a problem.
• With multi-level marketers, determine how many individuals are participating in the program and the average amount of money made by each participant. Could you make any money if you only sold the products and did not recruit any new salespeople to the program?
• Never invest more than you can afford to lose. Speak with a professional financial advisor before making any large invest­ments.
Terry Goddard Warns Consumers About Text Message Scam
(Phoenix, Ariz. – April 9, 2008)
Attorney General Terry Goddard today warned consumers about the latest “phishing” scam using text messaging. The scam is a variation on traditional “phishing,” which involves scammers searching for personal identifying or financial information by sending phony emails.
The text message scam works like this: A consumer receives a text message stating that a bank account has been suspended. The consumer is provided a phone number to call to “reactivate” the account. When the phone number is called, a recorded message asks the person to enter his or her bank account number. The text messages have falsely claimed to be from various banks and credit agencies in the state, such as Arizona Central Credit Union. This is a scam! These text messages are fraudulent and are an attempt to steal personal identifying and financial information.
(For the full version of this Scam Alert visit www.azag.gov)16 17
Certified check fraud is a growing area for scam artists. There are several versions of this scam circulating in Arizona. The initial contact can come through an unsolicited telephone call, over the Internet or through the mail. One version of the scam is to include a check (most of the time a cashier’s check) with a prize notice. The notice says that the consumer has won a prize, but must pay a sub­stantial “tax” or “administrative fee.” The scam artist tells the con­sumer that the enclosed cashier’s check comes out of the winnings and will cover the charges. The check looks real, but is not.
In a different twist, the scam artist may pose as a “buyer” for an item over the Internet. The scam artist offers to pay with a U.S. bank cashier’s check. Once the offer is accepted, the “buyer” makes some excuse for sending a cashier’s check that is more than the cost of the item and wants the seller to send the excess money back to the scam artist. The cashier’s check is counterfeit, but it takes the bank several days to discover this. In the meantime, the consumer thinks they received a good check and sends the item as well as the “extra” cash back to the scam artist.
Another variation is the “mystery shopper” scheme where consumers are approached to be “mystery” or “secret” shoppers. Consumers believe they are being hired to evaluate the effectiveness of a money transfer service. The scam artist sends the consumer a cashier’s check. The consumer is instructed to cash the check at their bank and then visit a large retailer that offers money transfer services. The consumer is told to pretend to be a customer wiring money to a relative in another country. The consumer is often instructed to wire most of the money and keep the rest as payment for acting as a “mystery shopper.”
Certified Check Fraud
In all of these situations, the certified check looks real, but it is not. The bank notifies the seller that the cashier’s check is coun­terfeit and the consumer is responsible for returning the money to the bank.
Red Flags
• Instructions by the sender to deposit the check and then wire money back to a third party. There is usually no legitimate rea­son for someone who is giving you money to ask for money to be wired back.
• Cashier’s or certified check made out for several hundred or even several thousand dollars more than the purchase amount of the product, despite the authentic looking logos from well known corporations and banks.
Protect Yourself
• Use caution if cashing or depositing a cashier’s check from an unknown source. Consumers are responsible for deposited checks. When a check bounces, the bank deducts the amount originally credited to the account. If there is not enough money to cover it, the bank may take money from other accounts.
• Consumers cannot rely on the fact that the check was accept­ed for deposit by their financial institution as evidence of the check’s authenticity. The check must go back to the originating bank to clear. This process can take several days and, in the case of an elaborate counterfeit, may take a few weeks. Ask your financial institution about its policy regarding counterfeit checks. 18
19
One of the most contemptible forms of fraud is charity fraud. Scam artists pose as charitable fundraisers in order to get your money. Even legitimate fundraisers should be asked certain questions to ensure that you are not falling victim to swindlers.
Paid Fundraisers
Some legitimate charities pay professional fundraisers to handle large-scale mailings, telephone drives, and other solicitations rather than their own paid staff or volunteers. Professional fundraisers are in business to make money and can legally keep a portion of the money they collect. If you are solicited for a donation, ask if the caller is a paid fundraiser and what percentage of your donation the fundraiser will keep. If you are not comfortable with the amount, you may decide to consider other options for donating.
In Arizona, paid fundraisers (also called contracted fundraisers) must register with the Secretary of State’s Office (www.azsos.gov). They must file their contracts with the charities so that you can find out more about them. Arizona law requires paid fundraisers, whether they contact you by phone or mail, to:
• Tell you that they are for-profit solicitors who are either asking for money for a charity or for a fundraiser working for the charity.
• Tell you the legal name of the charity or the paid fundraiser on whose behalf they are asking for money.
• Tell you their true legal names.
• Tell you that the purpose of the call (or letter) is to raise money for charities.
Charity Fraud and Scams
Red Flags
• Names that closely resemble those of legitimate organizations.
• Organizations that use meaningless terms to suggest they are tax-exempt charities. For example, the fact that an organization has a “tax I.D. number” does not mean it is a charity.
• Guaranteed sweepstakes winnings in exchange for a contribution. 20 21
Protect Yourself
• Ask for written information, including the charity’s name, address and telephone number, as well as how your donation will be dis­tributed.
• Know the difference between “tax-exempt” and “tax deductible.” Tax-exempt means the organization doesn’t have to pay taxes. Tax-deductible means you can deduct your contribution from
your federal income tax return. Even though an organization is
tax-exempt, your contribution may not be tax deductible.
• Avoid cash gifts that can be lost or stolen. For security and tax record purposes, it is best to pay by check or credit card.
• If you want to be truly safe, simply decline all pitches from unfamiliar charities. There are always charities in your area that need donations. Do your own research and contact one of them directly and ask how you can help.
• Before you donate, check out the charity with the Arizona Secretary of State’s Office (www.azsos.gov) and the Better Business Bureau (us.bbb.org) or one of the Web sites with information on nonprofit and charitable organizations, such
as GuideStar (www.guidestar.org) or Charity Navigator
(www.charitynavigator.org). The Secretary of State can tell you if a charity or fundraiser is registered and can also look at the contract the charity has signed and tell you what percentage of the donation goes to the charity and what the fundraiser keeps for profit.
Where to Complain about a Charity or Fundraiser
If you believe an organization may not be operating for charitable pur­poses or making misleading solicitations, contact the Arizona Attorney General’s Office and file a Consumer Complaint (www.azag.gov).
Terry Goddard Warns Of Scam Soliciting Donations for Veterans
(Phoenix, Ariz. – May 18, 2007)
Attorney General Terry Goddard today warned consumers to be wary of callers claiming to be from Arizona Veterans Hospital or Veterans Services asking for donations over the telephone.
The Attorney General’s Office has received information that individuals claiming to be associated with the hospital or veterans group are soliciting donations over the telephone to make food baskets for veterans. This is a scam! The Carl T. Hayden VA Medical Center Hospital and the Arizona State Veterans Home do not solicit over the telephone and are not collecting money for food baskets.
(For the full version of this Scam Alert visit www.azag.gov)22 23
As our use of the Internet continues to grow, so do the possibilities of Internet consumer fraud. Almost all of the scams discussed in this guide – from deceptive automobile advertising to promotion of fake business “opportunities” – have been promoted online. The Internet itself has generated a new breed of scams. Here are some things to watch out for:
• Internet auctions. Internet auction Web sites offer con­sumers the ability to purchase goods from around the world. Unfortunately, some sellers fail to deliver what they promise. In addition, some scam artists use information from a legitimate Web site to lure buyers into a fraudulent transaction, such as, request­ing payment from the buyer, but never delivering the goods.
• Pop up ads. “Pop ups” are the small windows that open auto­matically on your computer screen as you work or surf the Internet. Some pop ups advertise goods or services from legiti­mate companies, but others may be fraudulent. Watch out for pop ups that ask you to provide personal information – this may be a form of “phishing” that could put you at risk for identity theft. If the pop up congratulates you on having won millions of dollars and claims it is not a scam, you can be sure that it is.
• Spam. Unwanted emails crowd our in-boxes. You may have given your email address to one person or Web site, only to find that your address has been sold or “harvested” to a marketing company. Spam email may be an annoying advertisement from a legitimate company or it may be a scam. Watch out for spam emails promoting chain letters (which are illegal if they involve money or valuable items and promise big returns), work-at-home schemes guaranteeing easy money or weight loss claims (often with false testimonials). Fight spam by complaining to the Federal Trade Commission (www.ftc.gov).
Internet Auctions and Fraud
Red Flags
• Emails or pop up ads that make unrealistic claims.
• Sellers who insist that you pay for a “free” gift.
• Unsolicited offers by email that appear to represent a trusted company.
• Product advertisements that lack specifications or adequate descriptions. Viewing a product on the screen can present dif­ferent challenges than seeing it in the store.24
25
Protect Yourself
• Know your merchant. Be familiar with the name and reputation of companies with which you are dealing.
• When ordering online, use a reputable third party escrow ser­vice, like PayPal, or at the very least, pay with a credit card to make the purchase. This way you can dispute the charge, if ser­vices are not rendered.
• Protect your privacy when purchasing goods through an online auction site. Never give your Social Security number or driver’s license information to a seller. (Be cautious if you are asked to supply personal information, not needed to make a purchase.
• Make sure the company or individual with whom you are doing business is legitimate. Send a “test” email to see if the email address is active and try to obtain a physical address rather than merely a post office box. Try to find a phone number for the seller and call the number to see if it is correct and working. Research the seller by checking with the Better Business Bureau (us.bbb.org), using an Internet search engine, or by checking government and business Web sites.
• To reduce pop up ads, learn how to use a pop up blocker on your computer. (Most Web Browsers include one, or a variety of options are available for free.)
• To reduce spam, guard the privacy of your email address. Consider using one email address for personal email communications and another for public purposes such as for electronic mailing lists or on Web sites.
• Complain about spam to the FTC (www.ftc.gov) or to your own Internet Service Provider. Include the full email header in your complaint.
• Keep good records - print copies.
Terry Goddard Warns of Phone Scam Promising Financial Grants
(Phoenix, Ariz. – Oct. 16, 2007)
Attorney General Terry Goddard is warning consum­ers of a phone scam offering phony financial grants.
The Attorney General’s Office has learned that Arizonans are receiving phone calls from scam artists posing as reputable grant foundations. Consumers are told that they are eligible to receive a grant, often thousands of dollars, either because they are a female small business owner or a senior. Consumers are asked multiple “pre-screen­ing” questions to determine eligibility for the grant. Upon approval, they are told they must pay a large sum of money up front as well as a finder’s fee. In return for these fees, they are promised the grant. This is a scam! These phone calls are fraudulent and are an attempt to gather personal information that could be used to facilitate identity theft.
(For the full version of this Scam Alert visit www.azag.gov)26 27
Identity theft is when someone fraudulently uses your personal identi­fying information to obtain credit, take out a loan, open accounts, get identification or numerous other things that involve pretending to be you. It is a very serious crime that can cause severe damage to your financial well-being if not taken care of promptly. People can spend months and thousands of dollars repairing the damage done to their credit history and good name by an identity thief. Even scarier, some cases of identity theft are connected to more serious crimes that may lead law enforcement to suspect you of a crime you did not commit. For more information, the Attorney General’s Office has a separate publication entitled Identity Theft Repair Kit that is available on our Web site at www.azag.gov.
Red Flags
• Failure to receive bills or other mail. A missing statement could mean an identity thief has taken over your account and changed your billing address to cover his tracks.
• Receiving credit cards for which you didn’t apply.
• Being denied credit or being offered less favorable credit terms, like a high interest rate, for no apparent reason.
Protect Yourself
• Guard your mail from theft. Instead of leaving your mail to be picked up in an unlocked mailbox, take it to the post office or leave it in a post office collection box. Try not to leave mail in your mailbox overnight. Consider installing a mailbox with a lock.
Identity Theft
• Place passwords on your credit card, bank and phone accounts, while avoiding using easily available information like your moth­er’s maiden name or birthday.
• Shred documents such as credit card offers and old bank state­ments rather than simply throwing them in the trash.
• Do not carry your Social Security Card on you.
• Check your credit report. Each of the major nationwide consumer reporting companies is required to provide you
with a free copy of your credit report, at your request, once every 12 months. To order your free annual credit report
from one or all the consumer reporting companies, visit
www.annualcreditreport.com or call 877.322.8228. You may also order your credit report by contacting any of the following credit reporting agencies:
Equifax
www.equifax.com
P.O. Box 740256
Atlanta, GA 30374
888.766.0008
Experian
www.experian.com
P.O. Box 9532
Allen, TX 75013
888.EXPERIAN (397.3742)
TransUnion
www.transunion.com
P.O. Box 6790
Fullerton, CA 92834
800.680.728928 29
• Place a security freeze on your credit report. Arizona’s security freeze law (ARS § 44-1695) allows consumers to place a security freeze on their credit report. A freeze prevents credit bureaus from releasing credit information without the consumer’s express permission. Businesses typically check credit histories before issuing credit or opening new accounts, so a credit freeze will prevent new credit accounts from being opened in the consumer’s name until the freeze is lifted. To place a freeze in Arizona, you must contact each of the three major credit reporting agencies. Arizona law allows a reporting agency to charge $5 per consumer to place a security freeze. There is also a $5 fee each time you temporarily lift or remove a security freeze. There are no fees if you provide proof that you are a victim of identity theft. To prove you are a victim, you must send a valid copy of a police report document showing your identity theft complaint. You can contact each consumer reporting agency for specific instructions on placing a security freeze.
• Do your homework before purchasing identity theft protection services. Identity theft protection services such as credit-report monitoring, fraud alerts, identity theft insurance and help for victims of identity theft are all available for a fee. However, you can do much of what these services provide for free. The Attorney General’s Office cannot vouch for the reliability or quality of any specific services or products, so be sure to check the track record of companies with the Better Business Bureau (us.bbb.org).30 31
If you think you are a Victim of Identity Theft
• Acting quickly is the best way to make sure this crime does not get out of control. Place a fraud alert on your credit reports by contacting the toll-free number of any of the three consumer reporting companies listed. Once you place the fraud alert in your file, you are entitled to order free copies of your credit reports. When you receive your reports, review them carefully and look for signs of suspicious activity, like accounts you didn’t open.
• Close the accounts that you know, or believe, have been tampered with or opened fraudulently.
• File a report with your local police department where you believe the theft took place. Make sure to get a copy of the report, as it can serve as “proof” of the crime when you are dealing with creditors.
• File a complaint with the Federal Trade Commission (www.ftc.gov) by calling 877.438.4338 (ID Theft Hotline).
Beware of “Grandparent” Scam
(Phoenix, Ariz. - October 16, 2008)
Attorney General Terry Goddard today warned seniors to be cautious if they receive telephone calls from someone who claims to be their grandchild and requests money for an urgent situa­tion. The Attorney General’s Office has received informa­tion that the “grandparent scam” has made it to Arizona.
In this scam, the fraud artist calls an elderly person and poses as their grandchild. The caller may say something like, “Grandma, I am so glad I reached you” or “Grandpa, it’s me, your favorite grandchild calling.” The caller waits for the grandparent to say something like, “Jimmy, is that you?” The caller will agree and state that he or she has either been in a bad accident or is in some type of trouble and needs money immediately. The caller then asks that the money be sent via money order or through a wire service such as MoneyGram or Western Union.
(For the full version of this Scam Alert visit www.azag.gov)32 33
Predatory loans and abusive lending practices are a common prob­lem for Arizona homebuyers and homeowners refinancing their mortgage. Predatory lending may occur when you are buying a home, refinancing a mortgage, or obtaining a home equity loan. Predatory lenders take advantage of borrowers who find themselves in difficult financial situations and who may lack the knowledge of where to look for hidden costs and fees in a loan transaction. In these types of transactions, predatory lenders may charge far more in points, fees, and other costs than justified by the borrower’s cred­it score and/or make loans that are difficult or impossible to repay. Another predatory loan practice is to promise the borrower a certain fixed rate and then, at the last minute, inform the borrower that he or she only qualifies for a higher rate or an adjustable rate. Those practices can lead to the loss of a consumer’s most important pos­session – their home – or years of unnecessary expenses.
Red Flags
• The loan has a limited low rate but can adjust upward after two or three years.
• The loan documents reflect an interest rate well above the market average; points and fees exceed six percent of the loan’s principal amount.
• The lender rushes you through the loan application and does not provide clear answers to your questions or explain the documents you are being asked to sign.
• The lender asks you to exaggerate your income to qualify for a larger loan.
• The lender suggests you take out a loan for more than the property is worth.
• The lender offers you loan terms that are not as good as originally promised.
Mortgage Foreclosure “Rescue” Schemes
• The lender promises cash back after the loan closes, but then most or all of it is eaten up by fees.
• There is a large penalty for loan payoff more than two years after the loan has closed.
• The lender tells you the Good Faith Estimate is inaccurate or is unwilling to give you one.
• There are unreasonably high fees and costs, such as high loan origination or underwriting fees, broker fees, and transaction and closing costs.
• The lender promises that you will be able to refinance into a better loan.
• The lender tells you that it will waive a prepayment penalty without putting it in the loan documents.
• Lenders seek you out by phone or mail.
Protect Yourself
• Never agree to a loan that you cannot afford to pay, including principal, interest, taxes, and insurance.
• Do research. Check the current mortgage rate for the loan term you want in the financial section of the newspaper or on the Internet.
• Shop around. You can often do better than the first offer.
• Know your credit score. You can obtain a free copy of your credit report by contacting a centralized source at www.annualcred­itreport.com or 877.322.8228. There are three different compa­nies that will each provide one report free of charge in a twelve month period.
• Contact the Arizona Department of Financial Institutions
(www.azdfi.gov) to determine if the loan company is a licensed financial lender and whether it has a disciplinary record.34 35
Phony Foreclosure “Rescue” Schemes
Phony “mortgage rescue” and “home foreclosure prevention” schemes are a rapidly growing problem in Arizona. Desperate home owners who have fallen behind on their mortgage payments and are on the verge of foreclosure may turn to these companies hoping to prevent the loss of their home. Be very careful. These schemes are designed to take your home and steal any equity you have built up. In one common foreclosure prevention scheme, the “rescue compa­ny” will lend the homeowner money (at high interest rates) to make back-payments owed to the mortgage lender. The homeowner must agree to make monthly payments to the rescue company that includes the original mortgage payment, plus a payment on the new loan. The homeowner also will be required to sign a deed transfer­ring the property to the rescue company. The homeowner ends up renting the home that they formerly held title to. If the homeowner fails to make rent payments on time, the rescue company evicts the former homeowner. All rights and equity in the home have been lost.
Red Flags
• The “rescue company” requires that you sign a deed transfer­ring your property to them and promises that once you have caught up with the past due mortgage payments, your home will be transferred back to you.
• The “rescue company” demands an up-front fee to negotiate with your lender.
• The “rescue company” tells you to sign over the deed to your home so it can work with your mortgage company to “save” your home from foreclosure.
• You are required to pay a “service fee” to locate a lender or buyer for your home.
• Understand that most loan terms are negotiable, including inter­est rate, choice of fixed or variable interest, length (term) of loan, prepayment penalty, points and fees.
• Do not borrow money unless you understand all of the loan terms. How much are you borrowing? How much will you pay each month? How long will you have to make payments? Focusing on only one term, such as monthly payment, may get you in trouble.
• Some lenders require the borrower to pay a penalty if the loan is paid off early. This “pre-payment penalty” may make it difficult to refinance to a lower interest rate. A loan with a prepayment penalty should have a lower interest rate than a loan without such a penalty. If you decide to allow a pre-payment penalty because you do not expect to refinance soon, negotiate so it lasts only for the first year or two of the loan.
• Ask for copies of the loan documents in advance so you have plenty of time to read them.
• Read every document carefully. Never sign a mortgage docu­ment that has blank spaces.
• Study the Good Faith Estimate carefully.
• If your current mortgage payments include insurance and tax payments, make sure to include those costs when comparing your current mortgage payments to a possible new loan pay­ment. Many times, the new lender leaves out insurance and taxes to make the new loan look better.
• Just because you have applied for a home loan does not mean you have to go through with it. In the case of refinances and home equity loans, EVEN AFTER YOU SIGN THE LOAN PAPERS, YOU HAVE THREE DAYS TO BACK OUT. (15 U.S.C. § 1635(a) [Truth in Lending Act].)
• Complaints about lender practices should be directed to the Arizona Department of Financial Institutions (www.azdfi.gov), the U.S. Comptroller of the Currency (www.occ.treas.gov) or the Arizona Attorney General’s Office (www.azag.gov).36 37
• The “rescue company” offering to save your home from foreclo­sure rushes you through the transaction and urges you to sign documents immediately.
• The “rescue company” promises to personally pay your past due mortgage payments directly to the original lender.
• The “rescue company” forbids you to contact your original mortgage company.
Protect Yourself
• Never sign over the deed to your home as part of a foreclosure avoidance transaction. A deed should be signed over only if you intend to sell the home for a fair price.
• Contact the Arizona Department of Financial Institutions
(www.azdfi.gov) to determine if the company you are dealing with is a licensed financial lender and, if so, whether the lender has a disciplinary record.
• Before signing any “rescue” documents, you should consult either:
• an attorney
• a financial advisor
• a non-profit mortgage counseling agency, a HUD-certified counselor or
• a knowledgeable family member
• Read every document carefully. Do not sign contracts or docu­ments that have blank spaces.
• Make the monthly mortgage payments directly to your original lender. Do not allow another person to make payments on your behalf.
• When behind in your mortgage payments, contact your lender first. Often a payment plan can be worked out that allows you to keep your home while working through financial problems.
For more information on resources to help consumers avoid foreclosure, visit our Web site at www.azag.gov.
Terry Goddard
Warns of Fraudulent Mortgage ‘Assistance’ Businesses
(Phoenix, Ariz. – Dec. 8, 2008)
Arizona Attorney General Terry Goddard today warned homeowners facing foreclo­sure to be careful when approached by persons offer­ing to help with loan modifi­cations or other foreclosure-prevention techniques.
The Attorney General’s Office has experienced a recent increase in complaints from consumers who have been contacted by individuals claiming to have “connec­tions” and expertise in nego­tiating with mortgage lenders to reduce consumers’ monthly payments and/or prevent foreclosure. These individuals charge consumers high upfront fees and say they can modify mortgage terms to make them more affordable.
(For the full version of this Scam Alert visit www.azag.gov)38 39
Consumers who find themselves strapped financially sometimes turn to payday loans, tax return anticipation loan, or car title loans as a quick source of cash. Unfortunately, these loans often result in an endless cycle of debt for the consumer.
Payday loans, also called deferred presentment, cash advance or check advance loans, are short term loans usually at a high interest rate that become due on the borrower’s next payday. Before getting the funds, the borrower writes a check for the amount of the loan, plus the company’s lending fee. The company then gives the bor­rower cash in the amount of the check, minus the fee, and does not collect on the check until the next payday.
Lenders often charge fees that translate into outrageous annual percentage rates. For example, a two week $100 loan for a $15 fee turns out to be a loan with an annual percentage rate of 390%. Over a year, the borrower would pay an additional $390 over the $100 loan. Compare that to what a borrower would pay on a high-interest credit card with an annual interest rate of 24%. Over a year, the borrower would pay an additional $24 over the $100 loan. That’s a big difference!
Tax return anticipation loans (also called RAL) are secured by and repaid from a pending income tax refund. The proceeds of the loan may be available a few days faster than the tax refund, but consumers can expect to pay high fees to borrow their own money. According to a recent report by the Consumer Federation of America and the National Consumer Law Center, RAL loans cost $100, on average, depending on the size of the refund, in addition
Payday and Other “Quick Cash” Loansto other extra fees for tax preparation and assorted services. The interest rate on “RAL” loans could range from about 40% to over 700% APR (annual percentage rate). A refund anticipation loan is risky because it must be repaid even if the taxpayer’s refund is denied, less than expected, or frozen.
Auto title loans are also short term, high cost loans that can result in even more debt than the consumer initially owed or in the loss of the borrower’s car or truck. With an auto title loan, the consumer borrows money and promises to repay the loan in a short time, often 30 days later. As security or backing for the loan, the con­sumer gives the lender title to the consumer’s vehicle, sometimes also handing over a duplicate set of keys. If the borrower does not repay the loan on the due date, the loans are frequently rolled over for an additional fee. If the borrower still cannot repay the loan, the lender takes the vehicle. Thus, the borrower may lose a car that may be worth over $10,000 as a result of a $2,000 loan. In addition, the borrower is out whatever payments and interest were paid before the loan was in default and the car repossessed.
Red Flags
• Triple digit interest rate. Payday loans carry very low risk of loss, but lenders typically charge fees equal to 400% APR and higher.
• Single balloon payment, usually due in two weeks, unlike most consumer debt that allows for partial installment payments.
• No consideration of borrower’s ability to repay.40
41
Protect Yourself
• Under the Truth in Lending Act, you are entitled to know the cost of any type of credit applied for and to receive the informa­tion in writing, including the Annual Percentage Rate and the dollar amount of finance charges. Read this material carefully before you enter into the loan.
• Look to alternative sources for loans that do not carry such high interest rates or fees, such as credit unions, community based organizations, your employer, family or friends, or a cash advance on your credit card.
• Make sure that you can realistically pay the loan back when it becomes due before agreeing to its terms.
• To avoid taking out a tax refund anticipation loan to shorten the time before the refund is available, file your tax return electroni­cally (E-file) with the refund deposited directly into your bank account. You should receive your refund in seven to ten busi­ness days.
• Seek help from a reputable consumer credit counseling service.
Terry Goddard Warns Consumers About Internet Loan Scam
(Phoenix, Ariz. – Jan. 22, 2007)
Attorney General Terry Goddard today warned Arizona consumers about applying for personal loans over the Internet. Arizona consumers have reported to the Attorney General’s Office a scam offering personal loans to help them meet their financial obligations. “These scams are sophisticated because they take a victim through a ‘loan approval process,’ but these ‘lenders’ are scam artists looking to get your money,” Goddard said. “Once they have your money, they may disappear along with the Web site and phone numbers.”
(For the full version of this Scam Alert visit www.azag.gov)42 43
Phony lottery or sweepstakes prize notifications are among the most
successful scams in history. They can come through a telemarketing
call or over the Internet, but usually come by mail.
International Lottery Scam
Consumers receive a notice that they have won a lottery or other
type of prize. Usually the consumer never entered or heard of the
contest or lottery they have “won.” The scheme requires a small
payment for “processing” or “taxes” or “conversion of currency.”
The prize notification often advises the “winner” to keep the award
a secret to protect the winnings from the Internal Revenue Service.
Sometimes the prize letter requests that the consumer provide bank
account information so the prize money can be wired directly to
the consumer’s account. With this information, the scammer gains
access to the consumer’s bank account and may be able to transfer
money out of that account illegally.
Nigerian Letter Scam
If you have an email account or fax machine, then you have prob-ably
received some version of what is often referred to as a Nigerian
scam letter. The Nigerian letter scam is another twist on the prize
notification scam. The letter is circulated via fax, email or regular mail
and purports to come from all sorts of locations, including Nigeria,
Laos, South Africa, Europe, and Canada. The scam artist’s creative
stories seem endless. In one email, it is a supposedly high-ranking
government official supposedly contacting you, while in another
email, it is a bank employee notifying you that you are the next of kin
to a dead millionaire. The scam artist requests help in transferring
millions of dollars to the United States.
Prize Notification Scams
The scammer promises to give a
percentage of the money transferred, typically 20
to 30 percent, as payment for providing an account to receive the
funds. The scam artist typically requests bank account information
to facilitate sending the alleged money and may ask for a “good
faith” payment up front. Obtaining advance fees or personal financial
information (i.e., bank account numbers) is the scammer’s ultimate
goal. The victim gets nothing.
Red Flags
• Requests to wire or mail money to cover administrative fees,
taxes or legal fees involved in processing your winnings. A
legitimate lottery would deduct such expenses from your win-nings,
before sending them to you.
• Any attempt to prod or threaten you into sending money imme-diately
or the prize will be lost.
• Requests to send someone to your house to pick up the money.
• Requests for bank account information so your prize can be
deposited directly into your account.
• After declining the offer, you continue to get calls offering to
lower the fees required to claim your prize in an attempt to get
money from you.
44 45
• A foreign national asking for your help to transfer money into your American bank account in exchange for a share of the money. These schemes often include a tragic story designed to foster sympathy and a huge promised benefit.
Protect Yourself
• Never send money to “claim your prize.”
• Be suspicious of junk mail solicitations.
• Hang up on persistent callers. If calls become threatening, notify law enforcement.
• If you have lost money, report it at once. Contact the Arizona Attorney General’s Office (www.azag.gov). Once you have fallen victim to one scam, it is likely you will be targeted for future scams.
• NEVER give personal financial information, such as your bank account number.
• If you or someone you know has been contacted to participate in an Advanced Fee Scam from a foreign country (such as the Nigerian letter scam), contact the U.S. Secret Service (www.ustreas.gov/usss/).
Terry Goddard Warns Consumers of Social Security Scam
(Phoenix, Ariz. – April 19, 2007)
Attorney General Terry Goddard today warned consumers about a Social Security scam that is target­ing Arizona. Consumers are receiving calls from scam artists claiming to be from the Social Security Administration. When these people call, they say that they need to verify the consumer’s Social Security number, and ask the consumer to provide the first three digits of their Social Security number. Once the consumer gives the first three digits, the caller then tries to guess the next two digits, and in doing so, often prompts the consumer to provide those numbers.
This is a scam. The Social Security Administration will never call to confirm a Social Security number. If you receive such a call, do not give out any part of your Social Security number.
(For the full version of this Scam Alert visit www.azag.gov)46 47
Every year, thousands of consumers lose money to telemarketing con artists. Some companies that sell items over the phone are legitimate, but many are not. Be especially suspicious when anyone attempts to sell you something over the telephone.
The Federal Trade Commission’s (FTC) Do Not Call Registry allows you to stop getting telemarketing calls at home. You can register by calling 888.382.1222 (TTY 866.290.4236) from the number you wish to register. You may also register up to three phone numbers at a time online at www.donotcall.gov. You can regis­ter cell phone numbers as well as land lines on the Do Not Call Registry.
Some callers are not subject to the Do Not Call Registry, such as charities, political organizations, telephone surveyors, or businesses with whom you have an established relationship. If you receive a telemarketing call after you are registered on the Do Not Call list, get the company’s name or telephone number and then file a complaint with the Federal Trade Commission (FTC) at www.donotcall.gov.
Arizona’s telephone solicitations statute (A.R.S. §§ 44-1271 through 44-1282) require covered telemarketing companies to file a registra­tion statement with the Secretary of State (www.azsos.gov) and post a bond with the State Treasurer’s Office (www.aztreasury.gov) before they can solicit customers over the telephone. Arizona law also requires all telemarketing companies to tell their customers, both orally and in writing, that they have the right to cancel their order within three days after receiving the merchandise or any gift, bonus, prize or award.
Telemarketing Rip-offs
In some instances, credit card companies will issue a credit to your account if the telemarketing company is not legitimate. It is impor­tant to contact your credit card company as soon as you realize there is a problem, as they will issue a credit only for a limited time.
Red Flags
• “Act now” or the offer will expire.
• You have won a “free” gift, vacation or prize, but you must pay for “shipping and handling” or other charges before you get your prize.
• Insistence on an in-home presentation or product demonstra­tion.
• Insistence on payment in cash or that your payment must be picked up by a courier.
• Statements that it is not necessary to check on the company with the Better Business Bureau (us.bbb.org), a consumer pro­tection agency or an attorney.
• Refusal to send information about the offer in writing for you
to review.
Protect Yourself
• Place your phone number on the Do Not Call Registry
(www.donotcall.gov).
• If it sounds too good to be true, it probably is.
• Screen your calls. Let an answering machine pick up calls from unknown callers. Most telemarketers will not leave messages.
If a telemarketer does leave a message, you do not have to call back.48 49
• You can hang up!
• Never give out your bank account information or Social Security number to a caller you do not know.
• Never agree to let someone pick up your check or other form of payment.
• If the deal sounds good but you still have questions, ask the company for information in writing before paying for any goods or services. A legitimate company will be happy to oblige.
• Do your own research before buying from a telemarketer. Check with the Better Business Bureau (www.us.bbb.org) to see if there are complaints against the company. Use an online search engine to gather additional information about the company and spot potential red flags.
Consumer Advisory:
Tips on Spotting
Summer Travel Scams
(Phoenix, Ariz. – July 12, 2007)
Summer may already be half over, but there is still time to take that well-earned vacation. Attorney General Terry Goddard encourages consumers to make travel plans carefully and be aware of potential travel scams. The Attorney General’s Office has received information from Arizona travelers reaching their destination, only to find that the lodging arrangements they made were not legitimate. Travelers often lose their advance payments and have no place to stay.
(For the full version of this Scam Alert visit www.azag.gov)50 51
Arizona Agencies
and Organizations
Arizona Attorney General’s Office
1275 West Washington Street
Phoenix, AZ 85007
www.azag.gov
Consumer Information
and Complaints
602.542.5763 (Phoenix)
520.628.6504 (Tucson)
800.352.8431 (In-State Toll Free outside of Maricopa and Pima counties)
email: consumerinfo@azag.gov
Identity Theft Help Line
602.542.2145 (Phoenix)
800.352.8431 (Outside
Maricopa and Pima Counties)
email: identitytheft@azag.gov
Crime, Fraud & Victim Resource Center
602.542.2123 (Phoenix) 800.352.8431 (Outside Maricopa and Pima Counties)
The Better Business Bureau of Central/Northern/Western Arizona
4428 North 12th Street
Phoenix, AZ 85014
602.264.1721
877.291.6222
www.us.bbb.org
www.arizonabbb.org
The Better Business Bureau of Southern Arizona
434 South Williams Boulevard
Suite 102
Tucson, AZ 85711
520.888.5353
800.696.2827 (Outside Metro
Tucson)
www.us.bbb.org
www.tucson.bbb.org
Arizona Corporation Commission
1300 West Washington Street
1st Floor
Phoenix, AZ 85007
602.542.3026 (Phoenix)
520.628.6560 (Tucson)
800.345.5819 (In-State Toll Free)
www.azcc.gov
Arizona Department of Financial Institutions
2910 North 44th Street
Suite 310
Phoenix, AZ 85018
602.255.4421
800.544.0708 (In-State Toll Free)
www.azdfi.gov
Resource Page
Arizona Department of Housing
1110 West Washington Street
Suite 310
Phoenix, AZ 85007
602.771.1000
www.housingaz.com
Arizona Foreclosure Helpline
877.448.1211
Arizona Department of Insurance
2910 North 44th Street
Suite 210
Phoenix, AZ 85018
602.364.2499 (Phoenix)
520.628.6370 (Tucson)
800.325.2548 (In-State Toll Free)
www.id.state.az.us
Arizona Department of Public Safety
2102 West Encanto Boulevard
Phoenix, AZ 85009
602.223.2000
www.azdps.gov
Arizona Registrar of Contractors
3838 N. Central Avenue
Suite 400
Phoenix, AZ 85012
602.542.1525
888.271.9286 (In-State Toll Free)
602.542.1588 (TTY)
www.azroc.gov
Arizona Department of Revenue
1600 West Monroe
Phoenix, AZ 85007
602.716.7810
www.azdor.gov
Arizona Saves
6633 North Black Canyon Highway
2nd Floor
Phoenix, AZ 85015
602.246.3500
877.989.3500 (In-State Toll Free)
email: info@arizonasaves.org
www.arizonasaves.org
Arizona Secretary of State
1700 West Washington Street
7th Floor
Phoenix, AZ 85007
602.542.4285 (Phoenix)
520.628.6583 (Tucson)
800.458.5842 (In-State Toll Free)
www.azsos.gov
Arizona State Legislature
1700 West Washington Street
Phoenix, AZ 85007
602.542.4285 (Phoenix)
520.628.6583 (Tucson)
602.255.8683 (TTY)
www.azleg.gov
Arizona Department of Veterans Services
4141 North 3rd Street
Phoenix, AZ 85012
602.248.1550
www.azdvs.gov52 53
Arizona Department of
Weights and Measures
4425 West Olive
Suite 134
Glendale, AZ 85302
602.771.4920
800.277.6675 (Outside Phoenix
Metro Area)
623.463.9930 (TTY)
www.azdwm.gov
US Government Agencies
U.S. Attorney, District of
Arizona
Two Renaissance Square
40 North Central Avenue
Suite 1200
Phoenix, AZ 85004
602.514.7500 (Phoenix)
520.620.7300 (Tucson)
928.556.0833 (Flagstaff)
928.344.1087 (Yuma)
928.778.0880 (Prescott)
www.usdoj.gov
U.S. Comptroller of the Currency
Customer Assistance Group
1301 McKinney Street
Suite 3450
Houston, TX 77010
email: customer.assistance@occ.treas.gov
www.occ.treas.gov
Consumer Hotline
800.613.6743
Federal Communications Commission (FCC)
445 12th Street, SW
Washington, DC 20554
888.225.5322
888.835.5322 (TTY)
www.fcc.gov
Federal Trade Commission (FTC)
Consumer Response Center
600 Pennsylvania Avenue, NW
Washington, DC 205080
202.326.2222
877.FTC.HELP (382.4357)
866.653.4261 (TTY)
ID Theft Hotline
877.ID.THEFT (438.4338)
www.ftc.gov
Do Not Call Registry
888.382.1222
866.290.2436 (TTY)
www.donotcall.gov
U.S. Department of Housing
and Urban Development (HUD)
1 North Central Avenue
Suite 600
Phoenix, AZ 85004
602.379.7100 (Phoenix)
160 North Stone Avenue
Tucson, AZ 85701
520.670.6000 (Tucson)
www.hud.gov
U.S. Postal Service Inspection Service Criminal Investigations Service Center
ATTN: Mail Fraud
P.O. Box 20666
Phoenix, AZ 85036
877.876.2455
www.usps.com
U.S. Secret Service
602.640.5580 (Phoenix)
520.622.6822 (Tucson)
www.ustreas.gov
Credit Reporting Agencies
For a free annual copy of your
credit report, contact:
877.322.8228
www.annualcreditreport.com
Equifax
P.O. Box 740241
Atlanta, GA 30374
888.766.0008
www.equifax.com
Experian
P.O. Box 9532
Allen, TX 75013
888.EXPERIAN (397.3742)
www.experian.com
TransUnion
P.O. Box 6790
Fullerton, CA 92834
800.680.7289
www.transunion.com
Charitable and Nonprofit Organizations Information
Better Business Bureau
Wise Giving Alliance
4200 Wilson Boulevard, Suite 800
Arlington, VA 22203
703.276.0100
www.give.org
Charity Navigator
1200 MacArther Boulevard
Second Floor
Mahwah, NJ 07430
201.818.1288
www.charitynavigator.com
GuideStar
4801 Courthouse StreetSuite 220
Williamsburg, VA 23188
757.229.4631
email: customerservice@guidestar.org
www.guidestar.org54 55
Media Consumer Advocates
3 On Your Side
5555 North 7th Avenue
Phoenix, AZ 85013
602.207.3470
email: 3oys@azfamily.com
www.azfamily.com
12 for Action
602.260.1212
866.260.1212 (Outside Phoenix
Metro Area)
Monday-Friday, 11am-1pm
Consumer problems are only accepted via telephone
www.azcentral.com
ABC15 Investigators
602.685.6399
investigators@abc15.com
www.abc15.com
CBS 5 Investigates
602.650.5555
5investigates@kpho.com
www.kpho.com
Consumer Reports
www.consumerreports.org
NBC 11-Yuma
928.782.1111
www.kyma.com
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928.526.2232
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FOX 11-Tucson
520.770.1123
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Terry Goddard Warns Consumers About Rebate Scams
(Phoenix, Ariz. – May 12, 2008)
With the arrival of federal rebates, Attorney General Terry Goddard today reminded consumers to be suspicious phone calls or emails from people claiming to be from the Internal Revenue Service. IRS officials have reported consumers receiving postcards announcing “Rebate Credit!” and emails with the IRS logo seeking Social Security and bank account numbers to complete the processing of the rebate payment. Often recipients are led to believe that failing to provide the information will prevent them from receiving their rebate or refund or even cause them to be audited. Email attachments can also contain spyware that enables the thief to steal victims’ personal and financial information.
(For the full version of this Scam Alert visit www.azag.gov)56 57
Important Information About Consumer Complaints
The Arizona Attorney General has the authority to bring actions alleging violations of the Consumer Fraud Act. Consumer fraud is defined as any deception, false statement, false pretense, false promise or misrepresentation made by a seller or advertiser of merchandise. Concealment, suppression or failure to disclose a material fact may also be considered consumer fraud in certain instances. Merchandise is broadly defined to include any objects, wares, goods, commodities, real estate or intangible items such as services. The Consumer Fraud Act is found at Arizona Revised Statutes (A.R.S.) §§ 44-1521 through 44-1534.
The Attorney General’s Office does not have the authority to represent individual consumers. However, our consumer experts look into every complaint. They provide an opportunity for the business named in the complaint to resolve the dispute voluntarily. If the complaint is not resolved, it is reviewed for further action by our Office. If we file a consumer fraud lawsuit for a matter in which you filed a complaint, you may be named as a victim in our complaint or called as a witness at trial (with your consent). If the Court action is successful, you might be awarded damages by the Court.
If you believe you are the victim of consumer fraud, please file a complaint with all the requested information. Please also send us copies of any documentation to support your complaint (for example, a copy of a contract, phone records, the names and addresses of persons involved). Complaint forms and instructions for filing are on our Web site at www.azag.gov. You may also request a form be mailed to you by contacting the Attorney General’s Consumer Information and Complaints Office in Phoenix at 602.542.5763; in Tucson at 520.628.6504; or outside Maricopa and Pima Counties at 800.352.8431.
To stay ahead of the rapidly changing consumer scams and schemes, please sign
up for Scam Alerts on the Attorney General’s
Web site at www.azag.gov.